A meeting of trade ministers of India and the 10-member ASEAN on Tuesday agreed to review the bilateral free trade agreement (FTA) in goods to make it “more user-friendly, simple and trade facilitative”.
“The ministers tasked officials to work on the details of the review and submit an update at the next Asean Economic Ministers (AEM)-India Consultations,” according to a joint statement issued at the end of the ongoing AEM-India Consultations in Bangkok this week.
Commerce and Industry Minister Piyush Goyal, who represented India at the meeting, however, said India is not happy about the rising trade deficit with ASEAN, which gas doubled doubled to $10 billion in 2017 from $5 billion in 2011.
While bilateral trade has widened significantly since the pact was implemented in January 2010, a NITI Aayog study revealed that India’s trade deficit with ASEAN continued to increase after the signing of the FTA.
Preliminary ASEAN data show that two-way goods trade with India grew by 9.8 per cent from $73.6 billion in 2017 to $80.8 billion in 2018.
India, however, is nursing a growing trade deficit, mainly because of the low utilisation of the FTA route, as exporters to ASEAN countries face difficulties 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, it was stated.
In the joint statement, the ministers welcomed the recommendations of the ASEAN-India Business Council to further promote the potential of bilateral trade through the utilisation of the ASEAN-India FTA as well as cooperation in some areas of mutual interest, such as financial technology, connectivity, start-ups and innovation, empowerment of youth, and women and MSME development.
The Ministers also expressed their support for the fourth ASEAN-India Business Summit and Business Excellence Award, which will be held in Manila next month.