India will hold the next round of negotiations for a free trade agreement (FTA) with the 10-member Association of Southeast Asian Nations (ASEAN) in July in Jakarta, Indonesia. The talks will focus on reviewing the existing ASEAN Trade in Goods Agreement (ATIGA), which has been in place for over a decade. The review aims to expand the scope of the agreement to include more goods and services and reduce non-tariff barriers.
A senior government official stated that the review would focus on making the ATIGA more trade-facilitative and beneficial for businesses in the region. The decision to review the agreement was made at the 16th ASEAN-India Economic Ministers Meeting in 2019. The scope of the review was finalized in 2022, and discussions began in May 2023.
The last round of negotiations, held in Malaysia in May, concluded with the formation of a joint committee to undertake the review. The committee has met four times so far and has finalized the terms of reference and negotiating structure for the review.
India’s trade with ASEAN has declined by 5.74% in the current financial year, from $43.72 billion to $41.21 billion. ASEAN countries represent about 11% of India’s global trade. India exports manufactured goods, agricultural products, and chemicals to ASEAN countries, while importing palm oil, coal, and minerals.
The FTA review aligns with India’s Look East policy, which seeks to strengthen economic and strategic ties with Southeast Asia. Experts believe that restructuring trade and investment relations with ASEAN is crucial, as these economies are expected to have a significant impact on global trade flows.
