A decision on a long pending issue of initiating a review of the existing free trade agreement on goods between India and the 10-nation Asean bloc may be taken up during a meeting in Indonesia on Monday, an official said. The issue will come up for discussion and decision during the India-Asean economic ministers meeting on Monday. The meeting is being held on the sidelines of the ongoing meeting of the Economic ministers of ASEAN.
An Indian delegation is already there for the deliberations.
India has asked for the review of the agreement with an aim to eliminate barriers and misuse of the ASEAN India Trade in Goods Agreement, which came into effect on January 1, 2010.
"The agenda will come up for discussion and decision tomorrow during the India-Asean (Association of Southeast Asian Nations) economic ministers meeting," the official said.
Members of the Asean include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
In general, such review exercise includes matters like implementation issues, rules of origin; verification process and release of consignments; customs procedures; further liberalisation of trade in goods; and sharing and exchange of trade data.
India on several platforms has asked for a review of the agreement.
A trade expert said that the trade arrangement has to be reciprocal, mutually beneficial and should balance the aspirations of all the partners.
"Once the decision on the launch of the Asean-India Trade in Goods Agreement (AITGA) review is taken, formal negotiations for the review will start," the official said, adding that "AITGA review has been under consideration for a number of years. Joint committee on review has been constituted. Joint committee has done two meetings virtually so far on the issue".
The AITGA entered into force on January 1, 2010, which created one of the world's largest free trade areas. This was followed up by the ASEAN-India Trade in Services Agreement and another pact on investments both of which were implemented in 2015.
Recently, Commerce and Industry Minister Piyush Goyal had stated that the India-Asean trade agreement is the 'most ill-conceived' one.
Trade experts said that the review demand is there because India's exports to Asean have been affected due to non-reciprocity in FTA concessions, non-tariff barriers, import regulations and quotas.
Concerns have also been raised about the routing of goods from third countries in India through Asean members by taking the duty advantages of the agreement. Asean has a much deeper economic engagement with China through the Asean China Trade and Goods Agreement.
During 2010-11, India's exports to ASEAN increased to USD 25.7 billion from USD 18.11 billion in 2009-10. However, imports in 2010-11 rose to USD 30.6 billion from USD 25.8 billion in 2009-10.
Similarly, during 2022-23, India's exports to ASEAN increased to USD 44 billion from USD 42.32 billion in 2021-22. However, imports jumped to USD 87.57 billion in 2022-23 as against USD 68 billion in 2021-22.
The trade deficit has widened to USD 43.57 billion in the last fiscal from USD 25.76 billion in 2021-22. It was just USD 5 billion in 2010-11.
Source Name : Economic Times