India Seeks AITIGA Review Amid Trade Imbalance as PM Modi Prepares for ASEAN Summit
India is set to review its trade relations with ASEAN, focusing on addressing the widening trade imbalance. The 11th Joint Committee Meeting to review AITIGA is scheduled for October 6-7 in Jakarta, preceding PM Modi's attendance at the 47th ASEAN Summit. India's trade deficit with ASEAN has significantly increased since AITIGA's implementation in 2010, with imports growing by 186% compared to exports at 65.23%. Key issues include disparities in tariff line openings and evolving bilateral positions. India is considering separate FTAs with individual ASEAN members as a potential strategy.
*this image is generated using AI for illustrative purposes only.
India is gearing up for a crucial review of its trade relations with the Association of Southeast Asian Nations (ASEAN) as Prime Minister Narendra Modi prepares to attend the 47th ASEAN Summit in Kuala Lumpur on October 26-27. The focus is on addressing the growing trade imbalance and potentially reshaping the ASEAN-India Trade in Goods Agreement (AITIGA).
AITIGA Review on the Horizon
The 11th Joint Committee Meeting to review AITIGA is scheduled for October 6-7 in Jakarta. This review comes at a critical time as India seeks to address its widening trade deficit with the 10-nation ASEAN bloc. The Indian government is pushing for a country-wise review of AITIGA, highlighting the need for a more granular approach to trade negotiations.
Trade Imbalance in Numbers
The trade dynamics between India and ASEAN have shifted significantly since the implementation of AITIGA in 2010:
| Trade Direction | FY 2010-11 (in million USD) | FY 2022-23 (in million USD) | Growth (%) |
|---|---|---|---|
| India's Exports | 26,628 | 44,000 | 65.23 |
| India's Imports | 30,608 | 87,577 | 186.00 |
This stark contrast in growth rates has led to a substantial trade deficit for India. In the fiscal year 2024-25, the imbalance persisted:
- India's exports to ASEAN: $39.00 billion
- India's imports from ASEAN: $84.00 billion
ASEAN's Significance in India's Trade Landscape
ASEAN continues to be a crucial trading partner for India:
- Accounts for 11% of India's global trade
- Bilateral trade reached $123.00 billion in FY 2024-25
Tariff Line Disparities
One of the key issues India aims to address is the disparity in tariff line openings:
- India: Opened 71% of its tariff lines
- Indonesia: 41%
- Vietnam: 66.5%
- Thailand: 67%
This imbalance has contributed to the trade deficit and is likely to be a focal point in the upcoming review.
Changing Bilateral Positions
Government sources indicate that the bilateral positions of many ASEAN countries have evolved since AITIGA's implementation in 2010. This shift in dynamics underscores the need for a comprehensive review of the agreement.
India's Strategic Approach
As India navigates these trade challenges, it is keeping its options open. The government is maintaining the possibility of pursuing separate Free Trade Agreements (FTAs) with individual ASEAN members. This strategy could allow for more tailored trade arrangements that better serve India's economic interests.
Looking Ahead
As Prime Minister Modi prepares to engage with ASEAN leaders at the upcoming summit, the trade relationship between India and the Southeast Asian bloc is at a critical juncture. The outcome of the AITIGA review and potential bilateral negotiations could reshape the economic landscape between India and ASEAN for years to come.
The upcoming meetings in Jakarta and Kuala Lumpur will be closely watched by economists and policymakers alike, as they may set the tone for future trade relations in the Indo-Pacific region.
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