India and ten member states of the Association of South East Asian Nation (ASEAN) bloc have agreed to review their free trade agreement in goods (AITIGA) in a move to make it “more user-friendly, simple and trade facilitative” for businesses, economic and commerce ministers of these countries said Tuesday.
The ministers agreed to constitute a joint committee for this purpose, they added in their statement following the 16th AEM-India consultations at Bangkok. “The ministers tasked officials to work on the details of the review and submit an update at the 17th AEM-India consultations,” their statement read.
The move is being seen as a positive for India, which has also been engaged in negotiations to participate in the Regional Comprehensive Economic Partnership (RCEP) mega trade deal and is trying to resolve its trade deficit with several RCEP members, including ASEAN countries. For instance, despite its free trade pact with ASEAN nations, India’s deficit with Indonesia is around $10.6 billion, Thailand around $3 billion and Singapore around $4.7 billion.
“The ministers also noted the ongoing efforts for the ratification of the ASEAN-India Investment Agreement and looked forward to the full ratification by all parties as soon as possible,” the statement further said.
Based on preliminary ASEAN data, two-way merchandise trade between ASEAN and India grew by 9.8 per cent to $80.8 billion in 2018 from $73.6 billion in 2017.
Recovery of foreign direct investment (FDI) inflows from India in 2018 amounted to $1.7 billion, placing the country as ASEAN’s “sixth largest” trading partner and source of FDI among ASEAN Dialogue Partners, the ministers’ statement said.
According to India’s preliminary data, FDI inflows into India from ASEAN last year was $16.41 billion — approximately 36.98 per cent of India’s total FDI inflows.
“The Ministers welcomed the recommendations of the ASEAN-India Business Council to further promote the potential of bilateral trade through the utilisation of ASEAN-India FTA as well as cooperation in some areas of mutual interest such as financial technology (FinTech), connectivity, start-ups, and innovation, empowerment of youth and women, and MSMEs development,” it added.