India may consider terminating Asean pact as FTA review drags

INDIA’S INTERESTS HAVE BEEN HURT BY ONE-SIDED’ FTA WITH ASEAN AND INDUSTRY PLAYERS WANT NEW DELHI TO EXIT THE PACT

- Rajeev Jayaswal

The Association of Southeast Asian Nations' (Asean's) lackadaisical approach in reviewing the free trade agreement with India despite nine negotiating rounds could force New Delhi to consider invoking the termination clause of the 2009 pact as India Inc's patience is running thin with massive Chinese dumping through this route, people in the know said on Sunday.

India’s interests have been hurt by the “one-sided” FTA with Asean and a large section of domestic industry wants New Delhi to exit the pact if revision efforts failed in the 10th round, the people said, requesting anonymity because of the confidential nature of the move. The 10th review meeting of the Asean-India Trade in Goods Agreement (AITIGA) is expected to be held in New Delhi mid-next month.

The deal was signed by the then commerce minister Anand Sharma on August 13, 2009.

The FTA, that came in force on January 1, 2010, adversely impacted India, particularly because of its weak provisions for “rules of origin” that led to massive dumping of Chinese goods via some of the 10 Asean Cambodia, countries Brunei, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam, they said.

"The Narendra Modi government put its foot down when the trade deficit between India and Asean jumped to $43.57 billion in 2022-23 in favour of the latter, from $5 billion in 2010-11," one of them said. On India's request, the first FTA review meeting took place in May 2023.