Explained | ASEAN-India Trade in Goods Agreement (AITIGA)

Senior officials of India and the Association of Southeast Asian Nations (ASEAN) will hold the next round of talks in July to review the existing free trade agreement in Jakarta, Indonesia.

The last round of the three-day negotiations concluded on May 9 in Putrajaya, Malaysia.

The discussions for review of AITIGA (ASEAN-India Trade in Goods Agreement) started in May 2023 to make it more trade-facilitative and beneficial for businesses across the region.

A joint committee, which is undertaking the review work, has so far met four times.

It has finalised its terms of reference and the negotiating structure for the review in its first two meetings and initiated talks for the review from its third meeting, which was held on February 18-19.

What is ASEAN?

• The Association of Southeast Asian Nations (ASEAN) was established on August 8, 1967 in Bangkok by five countries —  Indonesia, Malaysia, Philippines, Singapore, and Thailand.

• There are currently 10 member states: Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Laos, Myanmar, Cambodia and Vietnam.

• In November 2022, ASEAN announced that it has agreed in principle to admit East Timor, also known as Timor-Leste, as the group’s 11th member. The half-island nation will also be granted observer status at high-level ASEAN meetings.

• The ASEAN Summit is the highest policy-making body in ASEAN comprising the heads of State or government of ASEAN member states. As per regular practice, the ASEAN Summit Meetings shall be held twice annually. The first ASEAN Summit was held in Bali, Indonesia on February 23-24, 1976.

• ASEAN is considered one of the most influential groupings in the region. India and several other countries, including the US, China, Japan and Australia, are its dialogue partners.

ASEAN-India Trade in Goods Agreement

• The ASEAN-India Trade in Goods Agreement (AITIGA) is a trade deal between ASEAN and India.

• The Framework Agreement on Comprehensive Economic Cooperation between ASEAN and India was signed in October 2003 and served as legal basis to conclude further agreements, including Trade in Goods Agreement, Trade in Services Agreement, and Investment Agreement that form the ASEAN-India Free Trade Area (AIFTA).

• The ASEAN-India Trade in Goods Agreement entered into force on January 1, 2010.

• Under the Agreement, ASEAN Member States and India have agreed to open their respective markets by progressively reducing and eliminating duties on 76.4 per cent coverage of goods. 

• In September 2022, both sides tasked the AITIGA joint committee to undertake the review to make the agreement more trade facilitative and mutually beneficial.

• A total of eight sub-committees have been constituted under the AITIGA joint committee for undertaking negotiations on different policy areas related to the agreement.

• The first two meetings of the joint committee were held in May and August 2023.

• In the third meeting, the sub-committees reported the progress and outcome of their discussions related to market access, rules of origin and standards, technical regulations and conformity assessment procedures to the joint committee.

• India is asking for a review of the agreement with an aim to eliminate barriers and misuse of the trade pact.

• Both sides are aiming to conclude the review in 2025.

• India and ASEAN registered a bilateral trade of $122.67 billion in 2023-24.

• ASEAN is one of the major trade partners of the country, with a share of 11 per cent in India’s global trade.

• Exports to ASEAN countries grew from $37.47 billion in FY2019 to $41.21 billion in FY2024, a 9.96 per cent increase. On the other hand, imports from the bloc saw a more significant rise of 34.30 per cent from $59.32 billion to $79.67 billion.

India-ASEAN relations

• ASEAN centrality has been, and will remain, an important aspect of India’s ‘Act East’ policy which is a central element in the country’s foreign policy.

• ASEAN-India dialogue relations have grown rapidly from a sectoral dialogue partnership in 1992 to a full dialogue partnership in December 1995. The relationship was further elevated with the convening of the ASEAN-India Summit in 2002 in Phnom Penh, Cambodia. Since then the ASEAN-India Summit has been held annually.

• At the ASEAN-India Commemorative Summit held in December 2012 in New Delhi, the leaders adopted the ASEAN-India Vision Statement and declared that the ASEAN-India Partnership stands elevated to a ‘Strategic Partnership’. 

• In 2022, ASEAN-India relations were elevated to ‘Comprehensive Strategic Partnership’, that is meaningful, substantive and mutually beneficial.

• The collaboration has transcended the realm of functional cooperation to cover political and security dimensions. India participates in a series of consultative meetings with ASEAN under the ASEAN-India Dialogue Relations, which include Summit, ministerial meetings, senior officials meetings, and meetings at experts level, as well as through dialogue and cooperation frameworks initiated by ASEAN, such as the ASEAN Regional Forum (ARF), the Post Ministerial Conference (PMC) 10+1, the East Asia Summit (EAS), Mekong-Ganga Cooperation and Bengal Initiative for Multisectoral Technical and Economic Cooperation (BIMSTEC), which help contribute to enhancing regional dialogue and accelerating regional integration.

• India’s bilateral trade with ASEAN economies is expected to reach $300 billion by 2025, and it is the fifth largest trading partner for India following North America, EU, North-East Asia and GCC-West Asia.