Progress on India-ASEAN FTA Review Remains Limited

Image Source: KNN India

The review of the India-ASEAN Free Trade Agreement (FTA) has hit a bit of a wall, with little progress made despite multiple rounds of talks. This comes as India’s trade deficit with ASEAN countries has grown significantly, raising concerns among Indian businesses and government officials.

Key Highlights:

The agreement, which has been in place since 2010, is up for review, but ASEAN countries have been reluctant to make changes, even after nine rounds of negotiations.
India’s trade deficit with ASEAN has ballooned from $8 billion in 2010 to over $45 billion in 2025. While Indian exports have doubled, imports have tripled, leading to an unbalanced trade relationship.
Indian industry feels the original deal was uneven, with India opening up more of its market compared to key ASEAN partners like Indonesia, Vietnam, and Thailand.
Many Indian exports to ASEAN still don’t benefit from the FTA, meaning exporters face regular tariffs instead of preferential rates.
The government is actively seeking feedback from businesses to understand the challenges in using the FTA and has started imposing duties to protect local industries.
Officials, including Commerce Minister Piyush Goyal, have voiced concerns about the deal, especially with worries that Chinese goods might be entering India through ASEAN countries.

With the review making little headway, India is now focusing on trade agreements with other regions like the UK, EU, and Gulf countries, where it hopes for more balanced deals.

Overall, the situation highlights the challenges India faces in balancing trade relationships and protecting its industries while engaging with global partners.

Source: Moneycontrol, The Hindu Businessline, Financial Express, NDTV Profit, Tribune India