• UGI USER
  • Dec 27, 2023
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INDIA-ASEAN TRADE PACT REVIEW

Why in the News?

  • The India-ASEAN Free Trade Agreement (FTA), implemented in 2010, will undergo negotiations starting February 2024.
  • India’s trade deficit with ASEAN has surged from $7.5 billion annually during the pact’s inception to $43.57 billion in FY23.
Source: IndiaAsean.org

ASEAN India Trade in Goods Agreement (AITGA):

  • The ASEAN India Trade in Goods Agreement (AITGA) will be revamped to enhance efficiency and incorporate changes in Rules of Origin (ROO).

About Key Focus Areas:

1.Rules of Origin (ROO) Modifications:

  • Changes in ROO will increase market access for certain items and prevent potential re-routing of goods through ASEAN countries.
  • Introduction of Product Specific Rules (PSRs) in ROO to relax rules for specific items, facilitating increased exports and preventing circumvention.

2. Trade Imbalance: 

  • The primary goal is to address the trade imbalance by modernizing the FTA, focusing on areas like product-specific rules and trade remedies.

3. Trade Remedies Chapter:

  • Modernized AITGA will feature a chapter on trade remedies, providing safeguards for domestic industries against unfair trade practices and unforeseen surges in imports.
  • Aims to create a safety net for industries facing challenges due to external trade factors.

4.  Focus on Efficiency, Not Expansion:

  • Making the existing pact more efficient, avoiding complexity by refraining from introducing new

areas such as environment, labour, MSMEs, or gender.

The review seeks to strengthen India’s position and ensure a balanced and mutually beneficial trade relationship with the ASEAN member nations.