ASEAN–India Free Trade Area Agreement Overview

The ASEAN-India Free Trade Area Agreement is a significant trade pact between the Association of Southeast Asian Nations (ASEAN) and India. It was signed in 2003.

The agreement aims to reduce trade barriers and create a single market between the two regions. This will increase economic cooperation and promote economic growth.

The FTA will eliminate tariffs on most goods traded between ASEAN and India, making it easier for businesses to export and import goods. This will benefit both countries and their people.

The agreement also includes provisions for services, investments, and intellectual property protection.

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The ASEAN-India Free Trade Area was established through the Framework Agreement on Comprehensive Economic Cooperation created in 2003. This framework agreement set the basis for India and ASEAN to negotiate future trade agreements.

The Agreement covers trade in physical goods and products, excluding trade in services. ASEAN and India signed a separate ASEAN-India Trade in Services Agreement in 2014.

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The Agreement came into force in 2010, creating one of the world's largest free trade areas, covering a combined market of close to 1.8 billion people. This massive market offers significant opportunities for businesses looking to expand their reach.

Under the Agreement, ASEAN and India have committed to progressively eliminating duties on 76.4 percent of goods and liberalizing tariffs on over 90 percent of goods. This means that many products will have reduced or eliminated tariffs, making it easier for businesses to trade between the two regions.

The ASEAN-India Trade in Goods Agreement was implemented in January 2010, marking a significant milestone in the establishment of the Free Trade Area. Since its implementation, merchandise trade between ASEAN and India has increased significantly.

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The ASEAN-India Free Trade Area is a significant trade agreement that has been in effect since 2010. It aims to increase trade and investment between India and the Association of Southeast Asian Nations (ASEAN) countries.

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The agreement has led to a significant increase in merchandise trade between ASEAN and India, with exports increasing by 23% and imports by 55% over the past decade. Imports have increased particularly from Cambodia, Singapore, and Vietnam.

One of the key aspects of the agreement is the elimination of tariffs on a large number of products. Tariffs on over 4,000 product lines will be eliminated by 2016, at the earliest. This includes tariffs on special products like palm oil, coffee, black tea, and pepper.

The agreement also covers trade in physical goods and products, but not trade in services. A separate ASEAN-India Trade in Services Agreement was signed in 2014.

The agreement has established one of the world's largest free trade areas, covering a combined market of close to 1.8 billion people. Under the agreement, ASEAN and India have committed to progressively eliminating duties on 76.4% of goods and to liberalize tariffs on over 90% of goods.

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The ASEAN-India Free Trade Area has had a significant impact on trade between the two regions. Since the implementation of the ASEAN-India Trade in Goods Agreement (AITIGA) in January 2010, merchandise trade has increased significantly, with exports rising by 23% and imports by 55% over the past decade.

India's trade deficit with ASEAN is a major concern, standing at around US$24 billion. This imbalance has led to discussions about revising the Agreement to ensure a more balanced trade.

The Agreement has led to increased imports from Cambodia, Singapore, and Vietnam. In fact, imports from these countries have seen significant growth since the implementation of AITIGA. The Indian government is now looking to expand tariff concessions and improve market access into ASEAN's automotive and agricultural sectors.

To achieve this, the Indian government is working to eliminate non-tariff barriers and other obstacles to increased trade. This is expected to see ASEAN-India trade increase from around US$80 billion to US$200 billion.

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The ASEAN-India Free Trade Area has its fair share of critics, and for good reason. The agreement has been criticized for potentially harming India's economy, particularly its plantation sector, manufacturing industries, and marine products industry.

One of the main concerns is that India's trade deficit with ASEAN will continue to grow, with imports exceeding exports by more than $6 billion in 2007-2008. This is largely due to ASEAN's competitive tariff rates, which make it difficult for India to gain access to the industry market in ASEAN countries.

The state of Kerala is also worried about the impact of the FTA on its economy. As an important exporter of plantation products, it fears that cheap imports of rubber, coffee, and fish would lower domestic production, adversely affecting farmers and ultimately its economy.

The Government of India must be able to effectively redistribute some of the wealth to those industries who suffer from the increased competition with ASEAN markets. This way, total welfare gains in India would increase and India would ultimately benefit from trade with ASEAN.

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A few industries that may be negatively impacted by the FTA include the plantation sector, some manufacturing industries, and the marine products industry. These sectors may struggle to compete with cheaper imports from ASEAN countries.

To mitigate these losses, the Government of India should consider providing support to these industries to help them adapt to the changing market conditions. This could include providing training and resources to help them improve their competitiveness and take advantage of new opportunities.

The FTA has the potential to be a game-changer for India's economy, but it's essential to address the concerns of critics and ensure that the benefits are shared fairly among all stakeholders.