Economy

India, ASEAN agree to review goods FTA pact, make it simpler

Our Bureau New Delhi | Updated on September 10, 2019 Published on September 10, 2019

Commerce Minister Piyush Goyal

Trade and Economy Ministers to submit review at the next AEM-India consultations

India and the 10-member ASEAN have agreed to initiate a review of the bilateral free trade agreement (FTA) in goods to make it “more user-friendly, simple and trade facilitative”.

“The Ministers tasked officials to work on the details of the review and submit an update at the next Asean Economic Ministers (AEM)-India Consultations,” said the joint statement issued at the end of the ongoing AEM-India Consultations in Bangkok this week. Commerce & Industry Minister Piyush Goyal represented India at the meeting.

Rising trade deficit

India is not happy about the fact that its trade deficit with ASEAN has widened significantly since the pact was implemented in January 2010. A NITI Aayog study reveals that India’s trade deficit with ASEAN doubled to $10 billion in 2017 from $5 billion in 2011.

One of the reasons for the growing deficit is the low utilisation of the FTA route by Indian exporters to ASEAN countries because of difficulties faced in negotiating the rules.

A review of the India-ASEAN FTA could help improve utilisation in India by making the pact simpler and more user-friendly, as stated.

In the joint statement, the Ministers welcomed the recommendations of the ASEAN-India Business Council to further promote the potential of bilateral trade through the utilisation of the ASEAN-India FTA as well as cooperation in some areas of mutual interest, such as financial technology, connectivity, start-ups and innovation, empowerment of youth, and women and MSME development.

The Ministers also expressed their support for the fourth ASEAN-India Business Summit and Business Excellence Award, which will be held in Manila next month.

Based on preliminary ASEAN data, two-way goods trade with India grew by 9.8 per cent from $73.6 billion in 2017 to $80.8 billion in 2018.

 

Published on September 10, 2019
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