Foreign Policy Watch: India-ASEAN

Preparing for ASEAN-India FTA Review


From UPSC perspective, the following things are important :

Prelims level: ASEAN-India Trade in Goods Agreement (AITGA), ASEAN

Why in the News?

The Commerce Department is gearing up for the upcoming negotiations on the ASEAN-India FTA review. The ASEAN-India FTA, while beneficial, has led to a widening trade deficit for India.

ASEAN-India Trade in Goods Agreement (AITGA):

  • The AITGA, signed in 2009 and effective in 2010, aims to reduce tariffs and non-tariff barriers on goods between ASEAN and India, covering sectors like agriculture, textiles, electronics, and machinery.
  • AITGA is an important component of the ASEAN-India Free Trade Area (AIFTA), which aims to create a single market for goods and services among ASEAN and India.

Major Concern: Growing Trade Deficit

  • Since the ASEAN-India Trade in Goods Agreement (AITGA), India has been facing a growing trade deficit.
  • The trade deficit means India is importing more than it is exporting. In 2022-23, India imported goods worth US$87.57 billion, while it exported US$44 billion.
  • In 2022-23, ASEAN made up 11.3% of India’s global trade. This deficit has grown a lot this year.

Because of this, there’s a need to urgently review and change the current trade setup between ASEAN and India.

Key Areas of Negotiation

  • Rules of Origin (ROO): Modifications in ROO are planned to increase market access for Indian products and prevent the rerouting of goods, particularly from China, through ASEAN countries.
  • Trade Remedies: A new chapter on trade remedies will aim to protect domestic industries from unfair trade practices and import surges.
  • Exclusion of New Areas: The agreement will not expand to cover additional areas like labour, environment, MSMEs, or gender to avoid complicating the pact.



Establishment Established in 1967 with the signing of the ASEAN Declaration (Bangkok Declaration).
Chairmanship Rotates annually among member states based on alphabetical order of their names.
Objective To promote political and economic cooperation and regional stability among member countries.
  • Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam.
  • East Timor (Timor-Leste) applied for membership in 2011 but is not yet a member.
  • Accelerate economic growth, social progress, and cultural development.
  • Promote regional peace and stability based on the rule of law and the UN charter.
  • Establish an ASEAN community comprising three pillars: ASEAN security, economic, and socio-cultural.
ASEAN Charter
  • Launched in 2008 to create a legal entity and establish a single free-trade area for the region.
  • ASEAN Intergovernmental Commission on Human Rights (AICHR) was established in 2009.
  • Adopted the ASEAN Human Rights Declaration in 2012.
ASEAN Plus Six
  • ASEAN Plus Three initiated integration efforts with East Asian countries (China, Japan, and South Korea).
  • Expanded to the East Asia Summit (EAS) including ASEAN Plus Three, India, Australia, and New Zealand.
India and ASEAN
  • A key pillar of India’s foreign policy and the foundation of Act East Policy.
  • India has a separate Mission to ASEAN and the East Asia Summit (EAS) in Jakarta.
  • ASEAN is India’s fourth-largest trading partner.
Delhi Declaration Identifies Cooperation in the Maritime Domain as a key area of cooperation under the ASEAN-India strategic partnership.
Delhi Dialogue Annual Track 1.5 event for discussing politico-security and economic issues between ASEAN and India.
ASEAN-India Centre (AIC) Undertakes policy research, advocacy, and networking activities with organizations and think tanks in India and ASEAN.
Strategic Cooperation India places ASEAN at the centre of its Indo-Pacific vision of Security and Growth for All in the Region (SAGAR).



[2018] Consider the following countries:

  1. Australia
  2. Canada
  3. China
  4. India
  5. Japan
  6. USA

Which of the above are among the ‘free-trade partners’ of ASEAN?

(a) 1, 2, 4 and 5

(b) 3, 4, 5 and 6

(c) 1, 3, 4 and 5

(d) 2, 3, 4 and 6

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