CURRENT AFFAIRS
CURRENT AFFAIRS
Description
A senior Indian government official recently revealed that the 10-member Association of Southeast Asian Nations (ASEAN) is currently resisting the scheduled review of the ASEAN-India Trade in Goods Agreement (AITIGA). This comes at a time when India is pushing for a more balanced trade relationship with ASEAN nations and aims to address structural concerns that have persisted since the agreement’s implementation.
Know About AITIGA
The ASEAN-India Trade in Goods Agreement (AITIGA) is a comprehensive free trade pact signed between India and ASEAN member states in 2009, during the 7th ASEAN Economic Ministers-India Consultations held in Bangkok, Thailand. The agreement officially came into force on January 1, 2010.
AITIGA emerged from the Framework Agreement on Comprehensive Economic Cooperation signed in 2003, which envisioned deeper economic integration between India and ASEAN. This framework paved the way for three key trade pacts:
ASEAN-India Trade in Goods Agreement (AITIGA)
ASEAN-India Trade in Services Agreement (2014)
ASEAN-India Investment Agreement
Together, these agreements constitute the ASEAN-India Free Trade Area (AIFTA), aimed at boosting two-way trade, investment, and economic collaboration.
Key Features Of AITIGA
Focus on Trade in Physical Goods - AITIGA deals exclusively with the trade of tangible goods and products, distinguishing it from the separate Services and Investment Agreements signed later. It facilitates reduced tariffs and enhanced market access for both sides.
Tariff Reduction Commitments - Under the agreement:
India and ASEAN agreed to progressively eliminate tariffs on 76.4% of tariff lines.
Over 90% of traded goods are to be liberalized in phases.
Tariff reductions are structured in two tiers one for WTO member ASEAN countries and another for non-WTO members, reflecting the economic diversity within ASEAN.
Least Developed Countries (LDCs) like Myanmar, Laos, and Cambodia have been given longer timelines to reduce tariffs to protect their developing economies.
Protection of Sensitive Products - To safeguard vulnerable domestic industries:
Each country can place certain goods in a “Sensitive List” or “Exclusion List”.
Products in the sensitive category may retain a moderate tariff (4–5%).
Items in the exclusion list are fully exempt from tariff liberalization.
India has obtained special protection clauses for key agricultural and plantation products like: Crude and refined palm oil, Coffee, Black tea, Pepper
These lists are reviewed annually to assess potential for further liberalization.
Trade Facilitation And Transparency Provisions
In addition to reducing customs duties, AITIGA emphasizes the creation of transparent, predictable, and consistent trade practices to reduce non-tariff barriers (NTBs). Key provisions include:
Simplified and modernized customs procedures
Restrictions on arbitrary or protectionist non-tariff measures
Adherence to WTO-compliant practices
Efforts to reduce bureaucratic delays and promote digitization of trade documentation
Institutional Mechanisms Under AITIGA
The agreement also established a Joint Committee, composed of representatives from India and ASEAN countries. This body is tasked with:
Overseeing the implementation of the agreement
Reviewing operational challenges
Proposing amendments or updates
Coordinating the work of sub-committees on customs, rules of origin, and dispute resolution
Furthermore, the agreement refers to the ASEAN-India Dispute Settlement Mechanism (DSM) for resolving trade disagreements in a structured and peaceful manner.
Safeguard And Security Clauses
To protect national interests and prevent economic disruptions, AITIGA allows for:
Safeguard measures if domestic industries are overwhelmed by sudden surges in imports
Security exemptions, enabling countries to restrict trade for reasons related to national security or public health
These provisions are in place to ensure that trade liberalization does not come at the cost of economic stability or sovereignty.
Current Impasse And India’s Position
India has been pushing for a review of AITIGA, citing concerns over its increasing trade deficit with ASEAN and limited market access for Indian goods. Despite this, ASEAN countries have shown reluctance to revisit or renegotiate the terms of the agreement.
The trade imbalance is a major concern. While ASEAN enjoys liberalized access to the Indian market, Indian exporters often face challenges such as:
Non-tariff barriers
Inconsistent regulatory standards
Limited access to agriculture and industrial goods sectors
India aims to rebalance the agreement, improve rules of origin, and ensure mutual benefit from the free trade framework.
India continues to engage diplomatically and through official channels to push for a comprehensive review of AITIGA. As ASEAN remains a strategic partner in the Indo-Pacific region, the success of this agreement will be pivotal in shaping India’s Act East Policy and ensuring equitable trade.
If ASEAN continues to delay the review process, India may be compelled to re-evaluate its participation in the current form of AITIGA and explore bilateral arrangements with individual ASEAN countries.
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