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Review of ASEAN–India FTA in Goods
The ASEAN–India Trade in Goods Agreement (also known as AITIGA), implemented in January 2010, is entering into its 11th year and the time is ripe to review and recast it in light of the new world order pulled open by the pandemic. This article provides the broad contours around which the review of ASEAN–India free trade agreement may focus.
Views are personal. Usual disclaimers apply.
This article is an outcome of the virtual panel discussion on the “Review of ASEAN–India FTA: Identifying Its Potentials and Challenges for Deepening India–Indonesia Economic Engagement,” which was organised by the Embassy of Indonesia in New Delhi in collaboration with the ASEAN–India Centre at the Research and Information System for Developing Countries, New Delhi on 29 November 2021. The authors would like to thank Dina Kurniasari, Indu Nair, Lina Alexandra, Pranav Kumar, and the webinar participants for their presentations, comments and thoughts on the subject.
India’s Act East Policy (AEP) is centred around its relations with the Association of Southeast Asian Nations (ASEAN). ASEAN and India have strengthened efforts in the fight against the pandemic and have bolstered their commitments towards challenging issues in the region (ASEAN Secretariat 2021). India and ASEAN have witnessed exemplary cooperation in various areas and with the 18th annual summit held in 2021.
Trade and investment are important areas in ASEAN–India economic cooperation whereas the ASEAN–India Trade in Goods Agreement (AITIGA) has been at the core of deliberations consistently for over a decade now. As the AITIGA completes a decade of governing trade between ASEAN and India, trade ministers from both sides have discussed the need for a review. The motive of the exercise would be to recast the free trade agreement (FTA) more suitably for businesses in terms of user-friendliness, simplicity and trade facilitation. The review exercise was agreed upon by the trade ministers of the 10 ASEAN member states (AMS) and India at the 17th ASEAN–India Economic Minister’s Consultations, convened on 30 August 2020 (ASEAN Secretariat 2020a). The growth in ASEAN–India economic ties comes from the enhanced trade and investment flows following the signing and implementation of the AITIGA. Before the pandemic struck in 2019, merchandise trade and investment flows between ASEAN and India stood at $97 billion and $2 billion, respectively, making India the sixth largest trade partner of ASEAN and its eighth largest foreign direct investment source (ASEAN Secretariat 2020a).
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