ASEAN Delays Review of Trade Pact with India Amid Growing Concerns

Strategic Insights -

The Association of Southeast Asian Nations (ASEAN) has put on hold the review of the Trade in Goods Agreement (AITIGA) with India, citing slow progress despite nine rounds of negotiations. India has been urging a review of the pact, citing a rising trade deficit, limited export gains, and uneven tariff cuts. The review was agreed upon in 2019, but negotiations have been stalled for over two years. India's commerce and industry minister, Piyush Goyal, has expressed concerns that the FTA is being used to route Chinese products into India.

Key Takeaways:

  • The review of the Asean India Trade in Goods Agreement (AITIGA) has been delayed by ASEAN due to slow progress despite nine rounds of negotiations.
  • India has been urging a review of the pact since 2010, citing a rising trade deficit, limited export gains, and uneven tariff cuts.
  • The trade deficit between India and ASEAN has widened from $4.98 billion in 2010-11 to $44.20 billion in 2024-25.
  • India's exports to ASEAN have declined by 5.77% in 2024-25, falling to $38.96 billion, while imports grew by 5.65% to $84.16 billion.
  • India has raised concerns that the FTA is being used to route Chinese products into India and that non-reciprocity in FTA concessions, non-tariff barriers, import regulations, and quotas are impeding Indian exports.
  • The Indian government is seeking strict adherence to the Rules of Origin provisions of the agreement by ASEAN.

Statistics:

  • The trade deficit between India and ASEAN has widened from $4.98 billion in 2010-11 to $44.20 billion in 2024-25.
  • In 2024-25, India's exports to ASEAN fell 5.77% to $38.96 billion, while imports grew by 5.65% to $84.16 billion.
  • The FTA has resulted in India slashing duties on 71% of its traded products, while Indonesia, Vietnam, and Thailand have brought tariffs down on 41%, 66.5%, and 67% of their traded products, respectively.
  • India maintains that its exports to ASEAN have been affected by non-reciprocity in FTA concessions, non-tariff barriers, import regulations, and quotas.

Sources:

  • IE Online Media Services Pvt. Ltd.
  • Contify.com