ASEAN-India Summit: Modi likely to pitch for effective review of free trade pact

New Delhi, September 4

Prime Minister Narendra Modi is likely to stress on an effective review of the ASEAN-India Trade In Goods Agreement (AITIGA) at the ASEAN-India Summit in Indonesia this week aiming for more balance in trade with the bloc, sources have said.

Modi, who is travelling to Jakarta on September 6-7 to attend the ASEAN-India Summit and the East Asia Summit, is also expected to highlight the need for enhanced cooperation in areas such as regionalconnectivity, resilient supply chains, food & energy security, maritime activities, health, digital economy including UPI, environment, smart agriculture and tourism.

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“After several years of India’s insistence on a review of the AITIGA, last month, at the Economic Ministers’ meeting, both sides agreed on carrying out a review of the pact and set a goal of concluding it by 2025. But the review has to be meaningful and address India’s concerns. Otherwise. it will be an exercise in futility,” a source tracking the matter told businessline.

Trade deficit

The 10-member ASEAN includes Brunei Darussalam, Burma, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. India’s trade deficit with the ASEAN, which was at about $5 billion in 2010-11 when the AITIGA got implemented, shot up to $43.57 billion in 2022-23. India exported goods worth $44 billion in 2022-23 to the ASEAN while its imports from the bloc were at $ 87.57 billion.

“Clearly, the ASEAN countries have been able to take advantage of the market access provided by India through duty cuts offered under the trade pact, but Indian exporters have not been equally successful. One reason for that are the non-tariff barriers, including import quotas and stringent technical standards, imposed in various sectors by the ASEAN countries. These NTBs, especially in sectors such as agriculture and automobiles, need to be removed,” the source said.

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India’s trade with ASEAN accounted for 11.3 per cent of India’s global trade in 2022-23. The PM will also stress on areas of co-operation as the forthcoming ASEAN-India Summit, which will be the first summit since the elevation of India-ASEAN relations to a Comprehensive Strategic Partnership in 2022.

Resilient supply chains, food security, energy security, health and financial stability were identified as priority areas of cooperation at the ASEAN-India Economic Ministers’ meeting last month and the ASEAN leaders are likely to endorse it at the Summit, the source said.

The Economic Ministers also discussed regional and global challenges, such as the multidimensional impact of the Covid-19 pandemic, climate change, heightened volatility in the global financial market, inflationary pressures, and geopolitical tensions.

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