Economy

India, Asean ‘need to resolve trade issues’

New Delhi | Updated on August 27, 2020

Piyush Goyal, Commerce Minister

Non-tariff barriers, rules of origin are pain points: Goyal

India and the 10-member Asean have not been able to harness their full trade potential for various reasons, and need to sort out each other’s concerns by removing non-tariff barriers, ensuring sanctity of rules of origin and opening markets to move towards a trade target of $300 billion, said Commerce and Industry Minister Piyush Goyal.

Since the India-Asean Comprehensive Economic Cooperation Agreement was implemented in 2010, bilateral trade increased from just $57 billion to $77 billion in about a decade, Goyal pointed out at the Asean-India Business Council virtual meet on Thursday.

“This doesn’t present such an exciting picture and there are many causes for that,” the Minister said, adding that he hoped business leaders from both sides would work to resolve the differences. “Businesses need to create more valuable regional value chains, remove non-tariff barriers on both sides, ensure sanctity of rules of origin and open markets to expand trade,” he said.

Asean includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Laos, Myanmar, Cambodia and Vietnam.

India is not too happy with the Asean-India CECA as it believes that it has led to more benefits for businesses in the bloc due to various non-tariff barriers erected by Asean countries. The trade deficit with Asean from 2010-11 until 2018-19 increased more than four times from $5 billion to $21.8 billion.

Moreover, lax implementation of rules of origin has also led to Chinese goods coming into India through some Asean nations at preferential tariff rates.

Both Prime Minister Narendra Modi and the Commerce Minister have earlier said that India’s problems needed to be addressed in the review of the India-Asean CECA which has been due for some time.

Goyal said that the business council meeting is a good forum to discuss concerns and best practices, share ideas, and flag problems.

Published on August 27, 2020

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