India-ASEAN Trade Relations: Renegotiating AITIGA to Address Trade Imbalance
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India and ASEAN have entered the final phase of renegotiating the Agreement on Trade in Goods (AITIGA) to modernize trade rules and reduce India's growing trade deficit. The review aims to simplify Rules of Origin and enhance market access for Indian sectors like textiles and chemicals.
India and the Association of Southeast Asian Nations (ASEAN) have accelerated the review of the ASEAN-India Trade in Goods Agreement (AITIGA), moving into the final negotiation phase. Originally signed in 2009 and implemented in 2010, the agreement is being overhauled to reflect contemporary economic realities and address long-standing Indian concerns regarding trade asymmetries.
The primary driver for this renegotiation is India's widening trade deficit with the ASEAN bloc, which has grown significantly over the last decade. A key focus of the discussions is the refinement of 'Rules of Origin' (ROO) provisions. India seeks stricter ROO to prevent the 'circumvention' of duties, where goods from third countries—most notably China—are routed through ASEAN nations with minimal value addition to exploit preferential tariff rates. By tightening these rules, India aims to protect its domestic manufacturing sector from unfair competition and dumping.
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