India-Vietnam Trade Relations: Addressing Barriers and Modernizing AITIGA

India and Vietnam recently convened the 3rd meeting of the Joint Sub-Commission on Trade in New Delhi. This meeting serves as a critical institutional mechanism to review bilateral trade relations and address operational hurdles. As both nations are key pillars of India's 'Act East Policy,' their economic synergy is vital for regional stability and prosperity in the Indo-Pacific.

The primary focus of the meeting was on identifying and removing non-tariff barriers that impede the flow of goods. Discussions covered market access for agricultural products, pharmaceuticals, and engineering goods. Furthermore, logistics challenges—often a significant cost factor in bilateral trade—were highlighted, with both sides emphasizing the need for improved maritime and air connectivity to reduce lead times and costs.

A significant portion of the dialogue centered on the modernization of the ASEAN-India Trade in Goods Agreement (AITIGA). India has consistently advocated for a review of this agreement to address the widening trade deficit with ASEAN nations. The goal is to ensure that the rules of origin are robust enough to prevent the circumvention of duties and to make the agreement more 'pro-business' by simplifying customs procedures. Modernizing AITIGA is expected to facilitate a more balanced trade profile, allowing Indian exporters better access to the Vietnamese market while integrating both nations more deeply into global value chains.

Vietnam remains one of India's most trusted partners in Southeast Asia. As global supply chains increasingly adopt 'China plus one' strategies, the India-Vietnam economic corridor offers immense potential for collaboration in manufacturing, electronics, and renewable energy. Strengthening this bond through trade facilitation and regulatory alignment is a strategic priority for India's foreign and economic policy.