4 Reasons India is Seeking To Reframe Free Trade Agreement with ASEAN
Details will be reviewed and a final report will be submitted at the upcoming ASEAN Economic Ministers-India Consultations
Indian government has been aiming to hammer out again the terms related to the FTA (free trade agreement) signed during the UPA reign in 2010. At a time when India is struggling with the plunging trade and economy, the government is striving to bring economy at a stable platform. As per the records, free trade agreement has led to 250% increase in India’s trade deficit with ASEAN Nations.
According to the Joint statement issued in India-consultations-AEM in Bangkok, The ministers have been asked to work on the review details and submit a final report at the upcoming AEM (ASEAN Economic Ministers (AEM)-India Consultations.
Recently, at the Bangkok summit in June 2019, Minister of Commerce and Industry, Piyush Goyal represented India at the ASEAN meet and brought ahead his proposal of reviewing FTA and refining the bilateral trade percentage between India and ASEAN countries.
Indian Trade Deficit Record
According to the data, India trade deficit with ASEAN countries raised to 10 billion dollars in 2017 to 5 billion dollars in 2011. The preliminary ASEAN data states the two-way goods trade with India grew by 9.8 % to 80.8 billion dollars in 2018 from 73.6 billion dollars in 2017.
Indian exports to ASEAN countries increased from 10 billion dollars in 2005-06 to 25.20 billion dollars in 2015-16. Counting imports over the same period, it increased fourfold from 10.80 billion dollars in 2005-06 to 39.84 Billion Dollars. During this period the share of the imports was up streamed whereas it went down in the export section.
How reconstructing FTA with ASEAN countries is of crucial significance
ASEAN members have accepted the recommendations of ASEAN-India Business Council to promote the perspective of bilateral trade through the usage of reviewed FTA with ASEAN countries.
It presented its interest in augmenting the cooperation in the mutual areas like MSME development, financial technology, start ups, connectivity and women empowerment.
According to the exporters, review can assist them to improve their utilization as it can make the pact easier and user friendly
According to government officials, the FTA review will help in progressing various sectors like manufacturing, Agriculture and ‘Make in India’ project.
The decision has infiltrated the optimism in the government’s efforts, as the centre is leaving no stone unturned to raise the sliding economy.