ASEAN-India Free Trade Agreement Review
A significant concern has arisen regarding the ongoing negotiations for the review of the existing free trade agreement (FTA) in goods between India and ASEAN nations, originally signed in 2009. The progress of these negotiations is reportedly moving "very" slowly due to resistance from ASEAN, as noted by an unnamed official.
- Current Trade Asymmetries
- Since the implementation of the FTA, India's exports to ASEAN have been approximately $38-39 billion annually.
- Imports from ASEAN nations have surged to $86 billion.
- Tariff Lines and Duty Concessions
- India has extended duty concessions on over 71% of its tariff lines to ASEAN countries.
- Conversely, ASEAN countries have opened fewer tariff lines for India:
- Indonesia: 41%
- Vietnam: 66.5%
- Thailand: 67%
- Industry Dissatisfaction
- The Indian industry has expressed dissatisfaction with the current FTA, viewing it as imbalanced.
Background and Recent Developments
The ASEAN-India FTA, effective from January 2010, is a critical component of India's trade strategy, with ASEAN accounting for about 11% of India's global trade. In August 2023, a comprehensive review of the agreement was announced, targeting completion by 2025.
Commerce and Industry Minister Piyush Goyal emphasized the need for a review, highlighting past strategic errors in forming FTAs with competitive nations, which inadvertently facilitated indirect trade routes from China into India.