Union commerce minister Piyush Goyal will push for expeditious review of the India-Asean trade agreement during his Laos visit this weekend as New Delhi is keen to plug holes in the pact by 2025, which was signed by the United Progressive Alliance (UPA) in August 2009, two people aware of the development said.
The Prime Minister Narendra Modi-led government decided to renegotiate the trade deal after goods from China and other non- Association of Southeast Asian Nations (Asean) nations are being routed through Asean-India Trade in Goods Agreement (AITIGA), taking advantage of duty concessions, the people said requesting anonymity.
Goyal is visiting Vientiane the capital of Laos on 20-21 September 2024 to attend the 21st Asean-India Economic Ministers (AEM-India) meeting and the 12th East Asia Summit Economic Ministers Meeting (EAS EMM). These annual meetings of Asean with their dialogue partners are being hosted by Lao People’s Democratic Republic (Laos), which is the Asean chair for 2024.
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EAS EMM will see participation of economic ministers from 10 Asean countries and eight other EAS partners — India, USA, Russia, China, Japan, Korea, Australia and New Zealand.
The 10 Asean members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Goyal is scheduled to attend several bilateral meetings during his visit with his counterparts from participating countries on the sidelines of two meetings, besides having an interaction with the Indian diaspora.
“In the AEM-India meeting, the ministers will review the progress in negotiations for review of ASEAN-India Trade in Goods Agreement (AITIGA),” commerce ministry said in a statement on Friday. The review of AITIGA is “high on our priority to make it more user friendly, simple and trade facilitative” for businesses, it added.
Speaking about the review of AITIGA, one of the persons mentioned above said, five rounds of talks on this matter have been concluded, with an understanding to conclude the review by 2025. The fifth AITIGA Joint Committee (JC) and related meetings for review of AITIGA were held in Jakarta (Indonesia) from July 29-August 1.
“The Modi government is of view that AITIGA was signed by the UPA regime without adequately protecting Indian interests. India is renegotiating it to curb the misuse of AITIGA by third parties. Besides, it wants Asean nations to facilitate Indian exports to their markets by removing non-tariff barriers (NTBs) on the principle of reciprocity,” the second person said.
The JC initiated discussions for review of AITIGA in May 2023 and after finalising its terms of reference it started negotiations in February 2024. The review is being done by eight sub-committees — national treatment and market access, rules of origin, standards, technical regulations and conformity assessment procedures, sanitary and phytosanitary, legal and institutional issues, customs procedures and trade facilitation, trade remedies, and economic and technical cooperation, he said.
The growing trade deficit with the bloc is also a key reason for the review of the AITIGA. Both sides are looking at product-specific rules under the rules of origin provisions to address the issue of market access, the people said.
According to official data, India has a huge trade deficit (more than $38.46 billion) with Asean. It exported merchandise worth $41.21 billion to Asean states during 2023-24 and imported goods worth $79.67 billion. India and Asean recorded two-way trade of $131.50 billion in 2022-23, with the bloc accounting for 11.3% of India’s global trade in the same period. An upgraded AITIGA is expected to increase trade between India and Asean and also enhance cooperation among members on resilient supply chains, food security, energy security, health and financial stability, the people said.