The forum was initiated by Indian Prime Minister Manmohan Singh to realise his commitment to strengthening economic ties with the Association of Southeast Asian Nations (ASEAN), especially on the basis of India’s “Look East” policy.

Speaking at the opening ceremony, Indian Minister of Trade and Industry Arnand Sharma said that the Indian government’s new policy will focus on attracting investment and technology from ASEAN by further fostering the current partnership between the two sides.

In the next five years, India will need up to US$1 trillion to modernise and upgrade its infrastructure, including seaports, roads, railways and waterways, and ASEAN countries are expected to pour a huge sum into these fields, said Arnand Sharma.

According to the minister, India and ASEAN are approaching the signing of a comprehensive economic partnership agreement (CEPA). India has signed similar agreements with several ASEAN nations, including Singapore, and plans to ink such deals with the bloc’s other members.

India and ASEAN “are committed to achieving a trade target of US$70 billion by 2012”, up 40 percent from US$50 billion in 2010, he said.

In his speech, Malaysian Minister of Foreign Trade and Industry Dato Sri Mustapa Mohamed stressed that ASEAN and India should speed up the signing of the CEPA in order to expand the Free Trade Agreement (FTA) in goods to the fields of investment and service.

Minister Mustapa Mohamed said that the ASEAN-India Business Forum would be an ideal place for the private economic sector to promote its vanguard role in developing the cooperation between the two sides’ businesses.

Meanwhile, ASEAN Deputy Secretary-General for Economic Community Sundram Pushpanathan stated that the full implementation of the ASEAN-India FTA after the two sides reach an agreement on the CEPA will pave the way for the formation of one of the world’s largest free trade areas with a 1.8 billion-strong market and a total GDP of US$2.8 trillion.

Under the ASEAN-India FTA, over 90 percent of the two sides’ products, including crude oil, refined palm oil, coffee, black tea and pepper, are exempted from import tariffs.

The agreement will pave the way for import tax exemptions for more than 4,000 products from ASEAN member countries and India, Sundram Pushpanathan said, adding that agreements on services and investment will create more favourable conditions for Indian companies, service providers and investors to access the ASEAN market and vice versa.

According to President of the Federation of Indian Chambers of Commerce and Industry (FICCI) Harsh C. Mariwata, since the ASEAN-India FTA took effect, two-way trade between the two sides has increased by 22 percent.

The target of reaching US$70 billion in two-way trade in 2012 will open up great opportunities for trading with India and for Indian groups to strengthen business relations with ASEAN partners, he added.