India, ASEAN to conclude trade pact review by 2025

India and the Association of Southeast Asian Nations (Asean) on Monday agreed to conclude the review of their existing free trade agreement in goods between by 2025. The pact is called the Asean-India Trade in Goods Agreement (AITIGA).

As per a joint media statement issued after the 20th Asean-India Economic Ministers’ Meeting in Indonesia: “The decision for review of AITIGA will now be placed in the forthcoming India-Asean Leaders’ Summit scheduled in early September for further guidance.”

The main agenda of this year’s meeting was the timely review of AITIGA which was signed in 2009. The two sides also deliberated the roadmap for the review and finalised the Term of Reference and the Work Plan of the AITIGA Review Negotiations.

India has asked for a review of the agreement to eliminate barriers and misuse of the trade pact. Concerns have also been raised about routing of goods from third countries in India through Asean members by taking the duty advantages of the agreement. India’s trade deficit with the bloc has widened to $43.57 billion in FY23 from $25.76 billion in 2021-22 and $5 billion in 2010-11.

Recently, commerce and industry minister Piyush Goyal said that the India-Asean trade agreement is the 'most ill-conceived' one.

“The review of AITIGA is expected to enhance and diversify trade while addressing the current asymmetry in the bilateral trade,” they said in the statement.

The 10 members of the Asean are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The review includes implementation issues, rules of origin, verification process and release of consignments, customs procedures, further liberalisation of trade in goods, and sharing and exchange of trade data.

India and ASEAN registered bilateral trade of $131.5 billion in FY23. The trade with ASEAN accounted for 11.3% of India’s global trade in 2022-23.

The two sides noted the non-tariff barriers flagged by the businesses and appreciated the growing exchanges between the stakeholders from both sides.

As per the statement, both sides identified resilient supply chains, food security, energy security, health and financial stability as priority areas of cooperation.