India Seeks Expeditious Review Of ASEAN Trade Agreement Amid Concerns Over Trade Deficit: MEA

(MENAFN- KNN India) New Delhi, Jun 27 (KNN) India is eager to expedite the review of its free trade agreement (FTA) with the Association of Southeast Asian Nations (ASEAN) and intends to maintain constructive engagement with the bloc, the Ministry of External Affairs (MEA) said on Wednesday.

The ongoing review pertains to the ASEAN-India Trade in Goods Agreement (AITIGA), originally signed in 2009 and implemented in 2010.

Speaking at a press briefing, MEA spokesperson Randhir Jaiswal confirmed that discussions are underway.

“It is our expectation that this needs to be completed as soon as possible. That is our hope, and we look forward to continuing our engagement with ASEAN on this particular matter,” Jaiswal stated.

The MEA's remarks follow a strong critique from Commerce and Industry Minister Piyush Goyal, who, at the India Global Forum (IGF) in London, questioned the rationale behind the original agreement.

“It really is silly because [that is] opening up my market to my competitors, many of whom have now become the B team of China,” he said, implying that the pact inadvertently facilitated the inflow of Chinese goods into the Indian market via ASEAN countries.

Since its implementation, the agreement has been linked to a significant widening of India's trade deficit with ASEAN-from around USD 8 billion in 2010 to USD 45.2 billion in FY25.

Analysts and government sources have pointed to an imbalance in tariff liberalisation. While India offered duty concessions on 71 percent of its tariff lines, partner countries such as Indonesia, Vietnam, and Thailand reciprocated with only 41 percent, 66.5 percent, and 67 percent respectively.

Following sustained pressure from India, ASEAN agreed to a formal review of AITIGA in 2023. However, progress has reportedly been limited, with the Commerce Ministry citing a lack of momentum in the negotiations.

The review is seen as critical to ensuring fairer terms and restoring balance in trade relations, particularly as India recalibrates its broader FTA strategy to prioritise equitable and strategic outcomes.

(KNN Bureau)

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