Sign In
Learn bits
Economy
Mahesh

26/12/23 07:21 AM IST

India-ASEAN set to review trade pact for modernisation in early 2024

In News
  • The talks aim to modernise the agreement, introducing product-specific rules and trade remedies while excluding new areas like labour and environment
New FTA
  • There will be a complete re-look at the entire FTA with the broad objective of bringing down the trade deficit for India.
  • New elements such as product specific rules and trade remedies will be brought in to make the FTA more efficient.
  • The first round of negotiations for reviewing the FTA, officially known as the ASEAN India Trade in Goods Agreement (AITGA), will be on February 18-19 in New Delhi
  • India’s trade deficit with the region, which was $7.5 billion per annum when the pact was implemented, has since ballooned to $43.57 billion.
  • In 2022-23, India’s exports to the region were valued at $44 billion, while its imports were at $ 87.57 billion.
  • Sectors that need propping up include chemicals and alloys, plastics and rubber, minerals, leather, textiles, gems and jewellery, per an industry analysis.
  • India will also need to make some concessions for the ASEAN as the review will have to benefit both but the objective of bringing balance has to be central.
Revamping AITGA
  • Modernising the AITGA will include incorporating changes in the Rules of Origin (ROO), which can work in favour of India by increasing market access for some items as well as blocking possible re-routing of goods by China through the ASEAN countries.
  • ROO are the criteria to determine the origin of a product and establish if it qualifies for duty cuts under an FTA.
  • PSRs will be introduced in the ROO chapter which can help India have relaxed rules for certain items to increase exports. At the same time, loopholes could be blocked to check circumvention by China.
  • The modernised AITGA will also have a chapter on trade remedies, which will seek to provide a safety net for domestic industry against unfair trading practices or unforeseen surges in imports of goods.
ASEAN
  • The ten-member ASEAN, which includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia, accounted for 11.3 per cent of India’s global trade in 2022-23.
  • The ASEAN was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN: Indonesia, Malaysia, Philippines, Singapore and Thailand.
  • The organization's goal is to promote stability and economic growth across these nations.
  • Its chairmanship rotates annually, based on the alphabetical order of the English names of Member States.
  • The region has one of the largest economies in the world, and it is believed that by 2050, it will have the 4th-largest economy in the world.
Source- The Hindu

More Related Current Affairs View All

26 Dec

Australia’s Online Safety Amendment

'Australia’s House of Representatives recently passed the “Online Safety Amendment (Social Media Minimum Age) Bill, 2024” which imposes obligation on certain soci

Read More

26 Dec

Ken-Betwa river-linking project

'Prime Minister Narendra Modi laid the foundation stone of the Ken- Betwa River Linking National Project on the 100th birth anniversary of former Prime Minister Atal Bihari Vajpaye

Read More

25 Dec

Quantum computing

'Quantum computing is an area of computer science that uses the principles of quantum theory at the atomic and subatomic levels.' It uses subatomic particles, such as electrons

Read More

India’s First Ai-Driven Magazine Generator

Generate Your Custom Current Affairs Magazine using our AI in just 3 steps