The 10-nation Association of Southeast Asian Nations (ASEAN) is stonewalling the review of the goods trade agreement with India and even after the nine rounds of negotiations, the process is far from complete, a senior official said Monday.
Both sides are working towards the 2025-end deadline for completing the review of Asean India Trade in Goods Agreement (AITIGA) and with just six months remaining, the movement has been very slow.
Within five years of the agreement on goods being activated in 2010 India had started asking for a review of the pact as its imports from Asean zoomed but it could not derive the expected benefits. It took India four years to bring Asean around to the need of review of the AITIGA. “Asean agreed to review in November 2019 and for two years did not start negotiating on it. Even after no rounds of review negotiations the progress has been very limited,” the official added.
The official said in the AITIGA while India slashed duties up 71% of its traded products, Indonesia brought tariffs down on just 41 % of the products, Vietnam 66.5% and Thailand 67%. These countries had higher per capita income than India but even then, New Delhi agreed to more concessions than the Asean members, the official added.
Recently commerce and industry minister Piyush Goyal had said that it was “silly” on India’s part to sign an FTA with Asean which is now being used to route Chinese products into India.
The official said in many cases the products entering India from Asean are subsidised at the production stage by Chinese suppliers of inputs thus making it difficult to locate the unfair trade practice at the point of export. Now in all dumping cases from Asean the authorities are examining the production costs of the inputs.
India also maintains that its exports to Asean have been impeded by non-reciprocity in FTA concessions, non tariff barriers, import regulations and quotas. Another Indian demand is strict adherence to Rules of Origin provisions of the agreement by Asean.
Since AITIGA became operational, the trade deficit with Asean widened from $ 4.98 billion in 2010-11, the first full year of operation of AITIGA to $ 44.20 billion in 2024-25. India’s exports to the region fell 5.77% on year in 2024-25 to $ 38.96 billion while imports grew 5.65% to $ 84.16 billion.