India pledges to slash tariffs, boost Asian trade

KUALA LUMPUR, Monday (AFP, Reuters) - Indian Prime Minister Manmohan Singh pledged Monday to bring down tariffs to promote trade with Southeast Asia and predicted that business with the region would double to 30 billion dollars by 2007.

Singh, speaking on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit, said India's growing middle class and ongoing liberalisation offered "immense opportunities" to overseas entrepreneurs.

"We are committed to bringing down tariffs to levels prevalent in ASEAN countries, to dismantle unwarranted barriers and to expand global capital flows," he said.

"I believe we can double the present level of bilateral trade by 2007, reaching a target of 30 billion dollars," he added.

Singh is due to attend the inaugural meeting of the East Asian Summit here on Wednesday. The grouping brings together the 10-member ASEAN bloc as well as Japan, South Korea, China, New Zealand and India.

It is hoped the new grouping, which accounts for about half the world's population, could be the precursor of an eventual free-trade East Asian Community.

Singh told business leaders that liberalisation policies were transforming India into a "vibrant marketplace" with significant investment potential.

"In the past year and a half our polices relating to investment, taxation, foreign trade, foreign direct investment, banking, finance and capital markets have evolved to make Indian industry and enterprise more competitive globally," he said.

"We have launched a massive programme for rural renewal which will upgrade rural infrastructure ... and new policies are enabling public-private partnership in the modernisation of roads, railways, ports, airports, power and urban infrastructure," he said.

Meanwhile Southeast Asia's regional grouping agreed on Monday to draft its first constitution, a document that could enshrine human rights and democracy in a region where both have come under critical scrutiny.

Leaders of the 10-member Association of South East Asian Nations (ASEAN), including military-ruled Myanmar and communist Vietnam, agreed an Eminent Persons Group including former regional leaders should decide the final shape of a charter.

The declaration they signed made no mention of human rights or democracy, but there are moves within ASEAN to write these into a document which could be signed in 2007.