ASEAN-India Trade

Disclaimer: Copyright infringement is not intended.

Context:

• The 4^th Joint Committee meeting for the review of AITIGA (ASEAN-India Trade in Goods Agreement) was held in Putrajaya, Malaysia.

Details:

• The Joint Committee undertaking the review work has met four times so far.
• The Committee finalised its Terms of Reference and the Negotiating Structure for the review negotiations in its first two meetings and initiated the negotiations for review of AITIGA from its third meeting held from 18-19 February 2024 in New Delhi.
• A total of 8 Sub-Committees have been constituted for dealing with different policy areas of the Agreement in the review and out of these, 5 Sub-Committees have started their discussions.
• All the 5 Sub-Committee reported the outcomes of their discussions to the 4^th AITIGA Joint Committee.
• Four of these Sub-Committees dealing with ‘National Treatment and Market Access’, ‘Rules of Origin’, ‘Standards, Technical Regulations and Conformity Assessment Procedures’ and ‘Legal and Institutional Issues’ also met physically in Putrajaya, Malaysia alongside the 4^th AITIGA Joint Committee.
• Both sides would next meet for the 5^th Joint Committee meeting from 29-31 July 2024 in Jakarta, Indonesia.

Challenges in India-Asean Relations:

   1. Indo-Pacific Rivalry:

• Earlier, China was seen as the main economic partner and the US as the primary security protector for ASEAN.
• This balance is now breaking, especially due to the Russia-Ukraine conflict, causing more tension in the region.
• The competition between major powers in the Indo-Pacific is risking the stability that helped the region grow.

   2. Unstable Geoeconomics:

• Geopolitical tensions in the Indo-Pacific are causing economic problems, like trade issues and supply chain difficulties.
• ASEAN is not united on how to handle these problems, making it harder to find solutions.

   3. India-ASEAN Challenge:

• Many agreements between India and ASEAN nations are not finalized yet, which is slowing down economic relations.
• Even though India is working on projects like the India-Myanmar-Thailand highway, they are not finished. In contrast, China's Belt and Road Initiative is becoming popular in some ASEAN countries.

4. Trade Issues:

• India's trade with ASEAN is not growing fast, and there's a big difference between what India buys from ASEAN and what it sells.
• Rules like where products come from, customs procedures, and health measures are causing problems. India also faces barriers for its professionals to work in ASEAN.

   5. Investment Challenges:

• It's hard for investors and businesses from both regions to work smoothly because of visa rules, work permits, and how businesses are run.
• ASEAN is not happy with India's 2020 CAROTAR rules, adding to the difficulties in investment and trade.

Conclusion:

• The Indo-Pacific rivalry is shifting, causing instability in economic and security relationships within ASEAN. Geopolitical tensions are impacting trade and technology cooperation, while internal divisions within ASEAN complicate problem-solving. India faces challenges in finalizing deals and completing connectivity projects, leading to a growing trade deficit with ASEAN. Barriers like non-tariff measures and investment complexities hinder smooth economic relations. These challenges highlight the need for strategic cooperation and diplomatic efforts to navigate the evolving dynamics in the region. The upgradation of AITIGA will further boost bilateral trade. 

Important article

https://www.mea.gov.in/Portal/ForeignRelation/India-ASEAN-Relations-August-2018.pdf

Source:

https://pib.gov.in/PressReleasePage.aspx?PRID=2020351