Background: ASEAN-India Trade in Goods Agreement (AITIGA) Signed in 2009. India opened 71% of its tariff lines to ASEAN.
In contrast:
- Indonesia: 41%
- Vietnam: 66.5%
- Thailand: 67%
- This asymmetry in market access has become a key concern for India.
Relevance : GS 2(International Relations),GS 3(Economy)
Trade Imbalance Concerns over 15 years:
- Exports to ASEAN doubled.
- But imports from ASEAN tripled.
- This growing trade deficit has fueled India’s demand for a review of the agreement.
Review Efforts and Deadlock
- Despite 9 meetings since Feb 2024, no tangible progress in the review.
- ASEAN seen as stonewalling reforms, resisting changes to existing terms.
China Angle: Rules of Origin Violation
- India has flagged indirect Chinese imports via ASEAN:
- ASEAN nations allegedly import cheap, subsidised Chinese raw materials, process them minimally, then re-export to India.
- Violates spirit of free trade and may amount to trade circumvention.
Strategic and Economic Implications
- Delay in review hurts Indian manufacturing and domestic industry competitiveness.
- Weak rules of origin enforcement undermines Atmanirbhar Bharat goals.
- India’s trade strategy faces a credibility test: balancing openness with protection.
Way Forward
India may need to:
- Push for stricter rules of origin and safeguard clauses.
- Explore bilateral tracks with key ASEAN nations.
- Use WTO-compatible tools to counter trade diversion.
