Feb 27 2022

India`s Free Trade Agreement with Asean Countries

After the agreement entered into force in 2010, one of the largest free trade areas in the world was created, covering a combined market of nearly 1.8 billion people. Under the agreement, ASEAN and India pledged to phase out tariffs on 76.4 percent of goods and liberalize tariffs on more than 90 percent of goods. The Agreement applies to trade in physical goods and commodities; it does not apply to trade in services. ASEAN and India signed a separate ASEAN-India agreement on trade in services in 2014. Together with the ASEAN-India Investment Agreement, the three agreements together form the ASEAN-India Free Trade Area. After India became an ASEAN sectoral dialogue partner in 1992, India saw its trade with ASEAN increase relative to its trade with the rest of the world. Between 1993 and 2003, bilateral trade between ASEAN and India grew at an annual rate of 11.2 per cent, from $2.9 billion in 1993 to $12.1 billion in 2003. [7] Much of India`s trade with ASEAN is directed to Singapore, Malaysia and Thailand, with which India has close economic ties. [6] Patel suggested that both sides should make serious efforts to finalize the scoping document before the ASEAN-India summit scheduled for October 2021 and to announce the review before the end of this year. “The minister also called on ASEAN to establish, without delay, joint committees for the review of services and investment agreements between India and ASEAN,” the statement added.

At the Fourteenth Asean Transport Ministers` Meeting (ATM) on 6 September, in November 2008, the ASEAN-India Aviation Cooperation Framework was adopted in Makati, Metro Manila, Philippines, which will form the basis for closer cooperation between ASEAN and India in the field of air transport. The ASEAN-India Air Transport Agreement (AI-ATA) is being negotiated with the 2011 implementation schedule. India and the 10 ASEAN members are expected to announce the revision of the Asean Free Trade Agreement for Goods before the end of the year, and the non-tariff measures faced by Indian exporters of automobiles and agriculture in the UNION should be repealed, said Anupriya Patel, Minister of State for Trade and Industry. With a population of $1.2 billion and a GDP of $1.8 billion – the 4th largest in the world – India is certainly a valuable trading partner of ASEAN. The agreement is a result of the 2003 Framework Agreement on Comprehensive Economic Cooperation between India and ASEAN. As its title suggests, this framework agreement has served as a basis for India and ASEAN to negotiate future trade agreements. The ASEAN-India Merchandise Trade Agreement (TIG) was signed on 13 August 2009 during the 7th ASEAN-India Economic Ministers` Consultations in Bangkok, Thailand. The Agreement entered into force on 1 January 2010 for India and certain ASEAN Member States. The entry into force of the agreement by other ASEAN member states and India will be the date on which the ASEAN member state and India are ready to implement the agreement. For Brunei Darussalam, the date of implementation of the Agreement on Trade in Goods was 1 June 2010. In tourism, the number of ASEAN visitor arrivals to India in 2006 was 277,000, while the number of visitor arrivals from India to ASEAN in 2008 was 1.985 million. At the sixth ASEAN-India Summit on the 21st.

In November 2007, in Singapore, India proposed to set a target of 1 million ASEAN tourist arrivals to India by 2010. The 2nd Asean and India Tourism Ministers` Meeting (ATM + India) on 25 January 2010 in Bandar Seri Begawan responded positively to India`s proposal to develop an ASEAN-India Tourism Cooperation Agreement and called on the ASEAN-India Tourism Working Group to continue discussions and prepare the draft agreement. The Ministers also supported the establishment of the ASEAN Tourism Promotion Chapter in Mumbai as an important cooperation platform for ASEAN National Tourism Organizations (NCBs) to market Southeast Asia to Indian consumers while creating mutual awareness between ASEAN Member States and India. ASEAN and India signed the ASEAN-India Agreement on Trade in Goods (TIG) in Bangkok on 13 August 2009 after six years of negotiations. The ASEAN-India-TIG Agreement entered into force on 1 January 2010. At the 7th ASEAN-India Summit held on 24 October 2009 in Cha-am Hua Hin, Thailand, it was agreed to revise the bilateral trade target of $70 billion to be achieved over the next two years, noting that the initial target of $50 billion set in 2007 may soon be exceeded. Since the early 2000s, India has experienced a growing trade deficit with ASEAN, with imports exceeding exports by more than $6 billion in 2007-2008. [11] There are concerns that a gradual liberalization of tariffs and an increase in the number of goods imported into India could threaten several sectors of the economy, in particular the plantation sector, some manufacturing industries and the maritime industry.

[11] As the dominant exporter of light industrial products, ASEAN has competitive tariffs that make it difficult for India to access the industrial market in ASEAN countries. [12] Before the signing of the agreement, the Prime Minister of Kerala, V.S. Achuthanandan, led a delegation to the Indian Prime Minister to protest against the free trade agreement. The State of Kerala is a major exporter in the domestic export of plantation products. He fears that cheap imports of rubber, coffee and fish will reduce domestic production and harm farmers and, ultimately, the economy. [13] Kerala has already seen its market flooded with cheap imports under the 2006 South Asian Free Trade Agreement. Cheap coconuts from Sri Lanka and palm oil from Malaysia have been hampering coconut cultivation in Kerala ever since. [13] The signing of the ASEAN-India Agreement on Trade in Goods (AITIGA) in Bangkok on August 13, 2009 paves the way for the creation of one of the largest free trade areas in the world with nearly 1.8 billion people and a combined gross domestic product (GDP) of US$4.5 trillion.

The ASEAN-India Agreement on Trade in Goods was signed on 13 August 2009 and entered into force on 1 January 2010. As ASEAN countries have benefited more from the pact, India wants a review so that its exporters have more access to the bloc`s market. The 10 ASEAN members are Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Myanmar, Cambodia, Brunei and Laos. The signing of the ASEAN-India Agreement on Trade in Goods paves the way for the creation of one of the world`s largest free trade agreements – a market of nearly 1.8 billion people with a total economic GDP of $2.8 trillion. The ASEAN-India FREE TRADE AGREEMENT provides for tariff liberalization of more than 90 percent of the products traded between the two dynamic regions, including “specialty products” such as palm oil (crude and refined), coffee, black tea and pepper. Tariffs on more than 4,000 product lines will not be abolished until 2016 at the earliest. India is actively participating in regional and bilateral trade negotiations aimed at diversifying and expanding its export markets while ensuring access to raw materials, intermediate products and capital goods needed to promote domestic value-added production. To mitigate the losses resulting from the early stages of trade, the Indian government must be able to effectively redistribute some of the wealth to industries that suffer from increased competition with ASEAN markets. [9] In this way, india`s overall welfare gains would increase and India would ultimately benefit from trade with ASEAN. .

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