India, ASEAN ministers may review trade pact in Aug-Sep, says source
Informist, Tuesday, May 30, 2023
--Govt source: India-ASEAN agreed on scope of trade pact review
--Aim to improve India-ASEAN export complementarity
By Krity Ambey
NEW DELHI – India is likely to hold a ministerial meeting with the Association of Southeast Asian Nations in Aug-Sep to review the free trade agreement between the trading partners, a commerce ministry official said.
The Government Had announced A Review Of The Free Trade Agreement with The Regional Bloc After the Agreement Completed 10 Years. The Scope Of The Review has Been Decided by All The Trading Partners
"The export complementarity between India and ASEAN has deteriorated, we aim to address that (through the review process)," the official told Informist.
In a trade agreement, the export structure of trading partners usually becomes similar over a period of time due to high intra-regional trade and the export complementarity goes down, the official said.
Complementarity measures the degree to which the export pattern of one country matches the import pattern of another. A high degree of complementarity indicates a more successful trade arrangement.
India and ASEAN had signed the free trade agreement in 2009, which came into effect on Jan 1, 2010. The regional bloc of ASEAN includes Vietnam, Indonesia, Thailand, Singapore, Malaysia, the Philippines, Myanmar, Cambodia, Brunei and Laos.
The government had announced a review of the free trade agreement with the regional bloc after the agreement completed 10 years. The scope of the review has been decided by all the trading partners, the official said.
"Some tariff lines are not included under the agreement, so they are not free. We will also look to explore those lines in the FTA review meet," the official said.
India and ASEAN aim to increase overall trade to $200 bln by 2025 from $131.57 bln in 2022-23 (Apr-Mar). The total trade with ASEAN in 2022-23 comprised $44.00 bln of exports, more than double the $18.11 bln before signing of the pact in 2009-10. Imports, on the other hand, more than tripled to $87.57 bln from $26.79 bln.
The total trade between India and ASEAN nations has increased substantially since the signing of the trade deal, but primarily on account of imports. The trade deficit with ASEAN has expanded more than five-fold to $43.57 bln in 2022-23 from $8.68 bln in 2009-10.
Non-tariff barriers have also posed difficulty in trade with ASEAN. During the COVID-19 pandemic, India had to deal with several restrictions on export of agricultural and auto products to ASEAN due to concerns about presence of the virus in the packaging. End