India, ASEAN agree to fast-track FTA review amid Trump’s tariffs

India and the ASEAN (Association of Southeast Asian Nations) have come to an agreement to fast-track negotiations for a review of the trade pact between them in a bid to overcome uncertainties owing to steeper tariffs imposed by the United States on the South Asian nation, a government official said.

Both sides aim to conclude a review of the ASEAN-India Trade in Goods Agreement (AITIGA) that started in February 2024 by the end of this year, the official said.

“We have discussed with all the ASEAN nations on how we can improve trade between India and ASEAN, this is one part of how to tackle the current situation by fast-tracking it (the review),” the government official said.

This is crucial since negotiations to review the free trade deal between India and ASEAN had earlier made little headway despite nine rounds of talks.

But, in the 10th round of talks that went on from August 10 to August 14 in New Delhi, the joint committee for the review of AITIGA witnessed significant progress.

“With ASEAN, we are telling them we need to increase trade between India and ASEAN, we are also looking at non-tariff issues along with tariff issues. We are also looking at regulatory compliances between the two. We have cited that WTO says that trade is expected to grow in Asia. This round has been quite fruitful, on how we should move forward. Everybody is concerned about uncertain global trade policies; everybody has realised that during this period both ASEAN and India needs to move forward to improve trade between the two parties,” the official said.

The US doubled tariffs on most Indian goods to 50 percent from August 27.

The next round of talks to review the India-ASEAN trade deal is scheduled to be held in Indonesia in October.

The Free Trade Agreement, which came into effect in 2010, has been criticised by the current government for not adequately addressing the trade imbalance, with imports from ASEAN growing faster than India’s exports to the region.

Moneycontrol had earlier reported that Indian exports to the ASEAN have doubled over the last 15 years, but imports from the bloc have more than tripled.

India is exporting around $38-39 billion to ASEAN, while imports from the bloc is around $86 billion.

When the agreement was signed in 2009, India opened up 71 percent of its tariff lines to the ASEAN countries whereas in return Indonesia offered access to only 41 percent, Vietnam 66.5 percent, and Thailand 67 percent.

ASEAN members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

The bloc is one of India’s major trading partners with a share of about 11 percent in the country’s global trade.