Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.
ASEAN-India Trade in Goods Agreement (AITIGA)
What to study?
For Prelims: Key features of AITIGA.
For mains: Significance of the agreement and concerns over India’s trade deficit with ASEAN nations.
Context: India and the 10-member ASEAN have agreed to initiate a review of the bilateral free trade agreement (FTA) in goods to make it more user-friendly, simple and trade facilitative.
The countries have also agreed to initiate the review of the ASEAN-India trade in goods agreement to make it more user-friendly, simple, and trade facilitative for businesses.
The ASEAN–India Free Trade Area (AIFTA) is a free trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and India.
It came into force from January 2010.
Under the pact, two trading partners set timelines for eliminating duties on the maximum number of goods traded between the two regions.
Based on preliminary ASEAN data, two-way goods trade with India grew by 9.8 per cent from $73.6 billion in 2017 to $80.8 billion in 2018.
Need for review:
- India is not happy about the fact that its trade deficit with ASEAN has widened significantly since the pact was implemented.
- A NITI Aayog study reveals that India’s trade deficit with ASEAN doubled to $10 billion in 2017 from $5 billion in 2011.
- One of the reasons for the growing deficit is the low utilisation of the FTA route by Indian exporters to ASEAN countries because of difficulties faced in negotiating the rules.
- A review of the India-ASEAN FTA could help improve utilisation in India by making the pact simpler and more user-friendly.
Sources: the Hindu.