There has been a longstanding demand from various business quarters to review the ASEAN-India FTA that has been in force since 2010.
In a recent development, the parties to the agreement have expressed the desire to re-evaluate the agreement to incorporate the changes in the trade dynamics.
Key Takeaways
- Review of the FTA to conclude by 2025.
- Negotiations to be held quarterly.
The ASEAN-India FTA is now open to renegotiation, according to the decision taken in the 20th ASEAN-India meeting of Economic Ministers held in Indonesia on Monday.
The ministers have decided to review the ASEAN-India Trade in Goods Agreement (AITIGA) signed in 2009. The decision was taken after a consensus on the same was achieved during the Joint Committee meeting of the AITIGA.
The parties to the agreement expressed the desire to conclude the review of the ASEAN-India FTA by 2025 with negotiations taking place quarterly.
The decision was taken after a protracted demand from different quarters to review the agreement, with the Minister of Commerce and Industries, Shri Piyush Goyal also calling the agreement ‘ill-conceived’.
The comments were made in the backdrop of a burgeoning trade deficit with the ASEAN countries while the exports from India showed minimal improvement. The trade deficit with the bloc was USD 43.6 billion, which was 8.7 times the trade deficit in 2010 (when the FTA came into effect).
More about the ASEAN-India FTA and the bloc
The ASEAN-India FTA was signed in 2009 and came into effect on 1 January, 2010. The FTA was signed within the ambit of The Framework Agreement on Comprehensive Economic Co-operation between ASEAN and India which was signed in 2003 and also served as the legal basis for signing the FTA.
The FTA provides the ground for the reciprocal opening up of markets to the parties to the agreement. Renewal of the agreement would allow India equitable access to the 10 countries of the bloc.
The ASEAN bloc consists of 10 countries in Southeast Asia- Brunei Darussalam, Cambodia, Indonesia, Lao-PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam (in alphabetical order). Recently, Timor-Leste has been allowed by the bloc to join as the 11th member.
