[Answered] Evaluate the sluggish progress in the ASEAN-India Trade in Goods Agreement review. Justify why policymakers must prioritize long-term strategic gains over minor short-term inconveniences for stronger ties.

Introduction

According to ASEAN Secretariat (2024), India-ASEAN trade touched $131 billion, yet tariff disputes and review delays under AITIGA hinder deeper integration. Revisiting this pact is vital for sustained Indo-Pacific economic resilience.

ASEAN–India Trade in Goods Agreement (AITIGA)

1. Signed in 2009 and implemented in 2010, AITIGA was designed to promote free trade between India and the 10 ASEAN nations by reducing tariffs on over 80% of goods.
2. However, since its launch, India’s trade deficit with ASEAN has widened — from $7 billion in 2010 to $43 billion in 2023 (Ministry of Commerce data).
3. This asymmetry triggered India’s demand for a review in 2019, which remains slow and incomplete.

Causes Behind the Sluggish Progress

1. Structural Asymmetry and Tariff Sensitivities: ASEAN enjoys greater export competitiveness in electronics, palm oil, and machinery, whereas India’s exports—textiles, pharma, and IT—face non-tariff barriers (NTBs). Example: Thailand’s complex sanitary standards restrict Indian agricultural imports. India’s request for rules of origin (ROO) verification to curb “third-country routing” (especially via China) has slowed negotiations.
2. Institutional Delays and Divergent Priorities: ASEAN operates on consensus-driven diplomacy, making decision-making incremental. India, post its RCEP withdrawal in 2019, has adopted a cautious trade posture emphasizing “fair and balanced” agreements. This policy asymmetry creates inertia.
3. Pandemic and Geoeconomic Reprioritization: COVID-19 disrupted review timelines; subsequent global fragmentation led India to focus on supply chain resilience (SCRI with Japan and Australia) rather than ASEAN-specific liberalization.
4. Digital and Services Neglect: While global trade shifts towards digital commerce and services, AITIGA remains goods-centric, excluding high-value sectors like AI, fintech, and e-commerce, weakening India’s comparative advantage.

The Strategic Case for Revitalizing AITIGA

1. Indo-Pacific Economic Architecture: Revamping AITIGA aligns with India’s Act East Policy and Indo-Pacific Oceans Initiative (IPOI), enhancing its credibility as an economic as well as security partner. ASEAN accounts for over 11% of India’s global trade, making it the fourth-largest trading partner.
2. Geopolitical Imperatives: Countering China’s Influence: China’s dominance through RCEP and Belt and Road Initiative challenges India’s regional leverage. Deeper ASEAN engagement through AITIGA strengthens “strategic autonomy” and rules-based trade order in the Indo-Pacific.
3. Supply Chain Diversification and Resilience: ASEAN–India collaboration in electronics, renewable energy, and critical minerals supports “China+1” diversification. Example: India–Vietnam cooperation in rare earths (2023) signals potential for strategic industrial synergy.
4. Socioeconomic and Developmental Synergy: Enhanced trade promotes ASEAN-India Vision 2030 goals—sustainable growth, MSME integration, and food security. It complements India’s “Viksit Bharat 2047” vision and ASEAN’s Community Vision 2045.

Prioritizing Long-Term Gains Over Short-Term Inconveniences

Short-term costs like tariff adjustments or transitional revenue loss must be weighed against broader benefits:

1. Economic Multiplier: Market access for India’s manufacturing, agriculture, and digital goods.
2. Strategic Leverage: Greater presence in the Maritime Southeast Asian corridor.
3. Geopolitical Signaling: Reinforces India’s role as a First Responder and trusted partner.
4. Sustainable Development: Promotes green transitions, food security, and blue economy initiatives under the ASEAN–India Year of Maritime Cooperation (2026).

Global precedents show that initial trade liberalization pains often yield high dividends — as witnessed in the EU Single Market (1993) and NAFTA (1994) transitions.

The Way Forward

1. Accelerate AITIGA Review Mechanism with time-bound deliverables.
2. Integrate services, digital economy, and value-chain partnerships.
3. Establish a Trade Facilitation Council for NTB resolution.
4. Strengthen Track 1.5 and 2 dialogues for business–policy synergy.
5. Foster MSME linkages for equitable benefits across sectors.

Conclusion

As Amartya Sen observed in “Development as Freedom”, growth must serve shared prosperity. AITIGA’s revival demands patience—short-term pains are justified by the promise of long-term regional resilience.