India, ASEAN agree to review decade-old free trade pact

The Association of Southeast Asian Nations (Asean) has agreed to India’s long-pending demand to review the free trade agreement (FTA) between the two sides.

 

The exercise could help address India’s concerns that it has not benefitted from the agreement and its goods trade deficit with the 10-member grouping has widened. The trade gap was $22 billion in FY19, up from $13 billion in FY18.

 

On Tuesday, the two sides agreed to make it more user-friendly, simple and trade facilitative for businesses, according to a joint statement.

 

This was agreed during a meeting between the grouping’s economic ministers and commerce minister Piyush Goyal in Bangkok on Tuesday at the 16th Asean Economic Ministers (AEM)-India consultations.

 

This will be the first review of the pact that came into force in 2010. The services component, in which India has a greater interest, and the investment chapter are yet to be ratified. The two sides also decided to constitute a joint committee for the review.

 

Goyal has tasked officials to work on the details of the review and submit an update at the next ministerial meeting.