The Secretary-General of the Association of Southeast Asian Nations (ASEAN), Dr Kao Kim Hourn, expressed the bloc’s desire for a “stronger” relationship with India, highlighting the substantial trade and investment potential between the two regions.
In a meeting with select Indian journalists, Dr Kao acknowledged the positive aspects of the current relationship and disclosed that the existing free trade pact between India and ASEAN is undergoing a comprehensive review.
As per Dr Kao, the goal is to enhance the India-ASEAN relationship, leveraging the significant demographic size of both populations. The Secretary-General revealed that the review of the India-ASEAN Free Trade Agreement (AITIGA), signed in 2009 and implemented in 2010, is anticipated to be completed by 2025.
During the 20th ASEAN-India Summit in Jakarta in September, Prime Minister Narendra Modi stressed the urgency of expediting the review process of AITIGA in a time-bound manner. This move aligns with the long-standing demand of Indian businesses to address implementation issues, rules of origin, customs procedures, and further liberalization of trade in goods.
India’s push for a comprehensive review aims to eliminate barriers and prevent misuse of the trade pact, ensuring a facilitative and mutually beneficial framework. The ongoing negotiations, scheduled on a quarterly basis, are expected to culminate in the finalization of the review by 2025.
In the fiscal year 2022-23, India witnessed an increase in exports to ASEAN, reaching USD 44 billion compared to USD 42.32 billion in the previous fiscal.
However, imports surged to USD 87.57 billion in 2022-23, up from USD 68 billion in 2021-22. This widening trade deficit, now at USD 43.57 billion, has raised concerns, prompting India to advocate for a thorough review to address trade imbalances and enhance the overall economic partnership between the two regions.