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ASEAN-India Trade in Goods Agreement (AITIGA)
Context:
The Commerce Department announced that the review of the ASEAN-India Trade in Goods Agreement (AITIGA) is a top priority, with the aim of making the pact more user-friendly, straightforward, and trade-facilitative for businesses.
More on News
- Economic ministers from India and the Association of Southeast Asian Nations (ASEAN) are meeting in Laos to assess the progress of trade deal negotiations.
- India plans to encourage ASEAN countries like Indonesia and Vietnam to provide greater market access for Indian products, aiming to create a more balanced agreement.
ASEAN-India Trade in Goods Agreement (AITIGA)
- It is a pivotal trade framework designed to enhance economic cooperation and trade relations between India and the member states of ASEAN.
- Signed on August 13, 2009, and implemented on January 1, 2010, AITIGA aims to facilitate trade by reducing tariffs and improving market access.
Key Features:
- Tariff Reductions: AITIGA promotes tariff liberalisation for over 90% of products traded between India and ASEAN countries.
- Trade Facilitation: The agreement emphasises simplifying trade procedures, including rules of origin (ROO), documentation requirements, and mutual recognition of standards.
- Focus Areas: The agreement addresses several sectors, including agriculture, textiles, chemicals, and machinery.
- It also recognises “special products” like palm oil and spices, which are vital for both regions.
Recent Developments:
- Review Process: As of August 2023, a review of AITIGA is underway to address existing imbalances in bilateral trade and improve its effectiveness.
- The review aims to make the agreement more user-friendly and responsive to current economic conditions, particularly in light of new trade agreements like the Regional Comprehensive Economic Partnership (RCEP) that have altered competitive dynamics in the region.
- The review of AITIGA is expected to conclude by 2025, with a focus on enhancing trade facilitation measures and addressing asymmetries in market access commitments.
- Trade Statistics: In the fiscal year 2022-23, bilateral trade between India and ASEAN reached approximately USD 131.5 billion, accounting for 11.3% of India’s global trade.
Challenges:
- Imbalances in Trade: Indian businesses have expressed apprehensions about increased imports from ASEAN countries adversely affecting domestic industries, particularly in sectors like chemicals and metals.
- Implementation Issues: The effectiveness of AITIGA has been questioned due to challenges related to non-tariff barriers and complex regulatory frameworks that can hinder smooth trade operations.
