19/12/2012 (Bernama) - Asean, the 10-member regional grouping, and India have one of the highest economic growth potential in the world, making it an attractive economic powerhouse, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said today.

Asean is expected to grow by 5.6 per cent and 7.3 per cent in 2013, respectively, higher than 5.2 per cent and 6.5 per cent, respectively, this year, he said.

"These are impressive growth rates compared to growth forecasts in many other countries and regions," he told a press conference ahead of the Asean-India Commemorative Summit tomorrow and Friday.

Hence, Asean and India provide vast opportunities for the business community, especially with the establishment of the Asean-India Free Trade Agreement (AIFTA) in 2010.

The FTA represents a huge market of 1.8 billion people with a combined gross domestic product (GDP) of US$3.8 trillion.

"Clearly, we can see the positive impact if this FTA is fully realised in the next few years," he said.

Going forward, he said, once the agreement on services and investment was finalised, Asean and India's business community are open to take advantage of all the three main pillars of bilateral trade, namely, goods, services and investment.

"There are still some minor issues, which we hope can be sorted out during the ministerial meeting today," he said.

Trade between Asean and India rose by 43 per cent compared with 2010 to reach US$74.9 billion in 2011.

The percentage increase is significant compared with Asean's trade expansion with other dialogue partners.

He said the target set is to achieve two-way trade of US$100 billion by 2015. Currently, investment flow from India to Asean totalled US$5.79 billion for the period of 2009-2011.

For Malaysia, India is one of the important trading partners, he said.

Since 1998, India has been Malaysia's largest export destination in the South Asia region.

Bilateral trade between Malaysia and India for the 2002-2011 period has increased more then six folds, he said, adding that the implementation of the Malaysia-India Comprehensive Economic Cooperation Agreement on July 1, 2011 has further boosted bilateral trade between the two countries.

Last year, total trade increased 32.7 per cent over 2010 to reach US$12.54 billion. Malaysia's export rose 34.6 per cent from US$6.5 billion in 2010 to US$9.2 billion.

Malaysia's major exports to India in 2011 were electrical and electronic products, chemicals and chemical products, manufactures of metal and palm oil while Malaysia's main imports from India were also chemicals and chemical products, manufactures of meal and meat.

From Jan-Oct 2012, Malaysia's export to India totalled US$7.7 billion, while imports were US$3.3 billion.

There is also significant increase in cross-flow investments between Malaysia and India.

To date, Malaysia has approved 110 manufacturing projects, with Indian investors involving US$1.19 billion in total investments, which created 14,240 jobs for Malaysians.

Between January-October, 2012, a total of 10 manufacturing projects with Indian particpants were approved with investments worth US$259.8 million.

Malaysia's investments in India amounted to US$892.3 million and are mainly in the construction, ICT and financial services, he said.

"However, if the investment routed through third countries, particularly Mauritius, is taken into account, Malaysia's investment in India is estimated worth more than US$3 billion," he added.