The ASEAN-India Trade in Goods Agreement (AITIGA) is a Free Trade Agreement (FTA) established between India and the ten-member ASEAN bloc. Implemented in 2010, AITIGA was designed to reduce or eliminate tariffs on traded goods, thereby promoting economic integration within the region.
India's motivation for signing AITIGA was to enhance exports, increase market access, and strengthen strategic ties with Southeast Asian economies. The agreement facilitated reduced duties on thousands of products, aiming to boost trade collaboration.
India has sought a review of AITIGA since five years after its implementation. This demand arose due to a significant increase in imports from ASEAN, which overshadowed the anticipated export gains. The widening trade deficit, combined with low reciprocity in tariff cuts, has raised concerns about the agreement's effectiveness.
As of 2024-25, India's trade deficit with ASEAN has escalated dramatically, increasing from $4.98 billion in the 2010-11 fiscal year to an alarming $44.20 billion. This shift highlights the growing imbalance in trade relations.
In the fiscal year 2024-25, India's exports to ASEAN witnessed a decline of 5.77%, totaling $38.96 billion. In contrast, imports increased by 5.65%, reaching $84.16 billion, further exacerbating the trade deficit.
India cut duties on approximately 71% of its traded products. Meanwhile, ASEAN countries provided fewer concessions, with Indonesia at 41%, Vietnam at 66.5%, and Thailand at 67%. This disparity raises questions about the agreement's overall balance.
India has expressed concerns regarding non-reciprocity, non-tariff barriers, and the misuse of Rules of Origin, particularly concerning Chinese goods that are routed through ASEAN countries to circumvent tariffs. This practice undermines the intended benefits of AITIGA.
Although a review was agreed upon in 2019, ASEAN has been slow to initiate negotiations. Despite nine rounds of discussions, progress has been minimal, with only six months remaining before the 2025 deadline for concluding the review.
Q1. What does AITIGA aim to achieve?
Answer: AITIGA aims to reduce trade barriers, promote regional economic integration, and enhance trade relations between India and ASEAN member countries.
Q2. How has AITIGA impacted India's trade balance with ASEAN?
Answer: AITIGA has led to a significant trade deficit for India, increasing from $4.98 billion in 2010-11 to $44.20 billion in 2024-25, indicating an imbalance in trade relations.
Q3. What specific changes is India seeking in the review of AITIGA?
Answer: India is looking for stricter Rules of Origin, balanced tariff concessions, and measures to tackle subsidized imports and non-tariff barriers.
Q4. Why is there a delay in the review of AITIGA?
Answer: The review has been delayed due to slow negotiations by ASEAN, despite an agreement to begin discussions in 2019, leading to minimal progress.
Q5. What tariff concessions have been made under AITIGA?
Answer: Under AITIGA, India has reduced duties on 71% of its traded products, while ASEAN countries have offered lower concessions, raising concerns about trade equity.
Question 1: What is the primary objective of the ASEAN-India Trade in Goods Agreement (AITIGA)?
A) To eliminate all trade tariffs
B) To reduce or eliminate tariffs on traded goods
C) To increase tariffs on imports from ASEAN
D) To establish a customs union
Correct Answer: B
Question 2: What has been the trend in India's trade deficit with ASEAN since AITIGA was implemented?
A) It has decreased steadily
B) It has remained unchanged
C) It has widened significantly
D) It has fluctuated without trend
Correct Answer: C
Question 3: What percentage of tariff concessions did India provide under AITIGA?
A) 50%
B) 71%
C) 66%
D) 41%
Correct Answer: B
Question 4: Which ASEAN country offered the least tariff concessions under AITIGA?
A) Vietnam
B) Thailand
C) Indonesia
D) Malaysia
Correct Answer: C
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