The ASEAN-India Trade in Goods Agreement (AITIGA) is a regional free trade pact signed in 2009 to boost trade in goods between India and the ASEAN economic bloc.
Genesis of AITIGA
- Initiated in 2003, signed in 2009
- Built upon ASEAN-India FTA Framework signed in 2003
- Came into force on 1 January 2010
Key Goals and Motivations
- Remove tariff barriers and facilitate ASEAN-India goods trade
- Tap the combined US$5 trillion market potential
- Enhance economic partnerships and integration
Coverage, Products and Safeguard Measures
- Covers over 11,000 products and tariff lines
- Includes manufactured goods, agriculture, electronics etc.
- Incorporates safeguard mechanisms against import surges
Trade Preferences and Duty Concessions
- Tariff cuts upto 20% for Vietnam, Laos, Cambodia, Myanmar
- 10% or higher duty cuts for more developed ASEAN members
- Special concessions for CLMV countries (new ASEAN members)
AITIGA Implementations in Phases
Phase I (2010-2016): Normal Track
- Focused on developed ASEAN countries
- Maximum Margin of Preference fixed at 5%
Phase II (2017-2022): Normal Track
- Expanded tariff cuts for all members
- Margin raised to 10% for ASEAN, Vietnam
Phase III (2023 onwards): Normal & Fast Track
- Faster cuts for remaining tariff lines
- India-Malaysia QTTA signed expediting cuts
Key Statistics on Growth Trends (2010-2023)
| Metric | Growth Percentage | Current Value |
| Bilateral Trade | 500% | $100 billion |
| Indian Exports | 600% | $30 billion |
| ASEAN Exports | 400% | $70 billion |
Positives from AITIGA Trade Integration
For India
- Duty-free access for 96% export items to ASEAN
- Better trade deficit management via export boost
- Gateway to Southeast Asia’s 650 million consumers
For ASEAN
- Access to world’s 5th largest economy
- Advantage to access India’s low cost manufacturing ecosystem
- Avenues for Indian investments into ASEAN infrastructure
2023 Updates and Way Forward
- Efforts to ease trade rules of origin criteria
- Push for agreement review to iron out issues
- Target to lift trade to $300 billion by 2025 set
Most Recent Developments
- The biggest milestone in Feb 2023 was Vietnam signing the AITIGA second review to eliminate 65% of lines from India’s tariff concession.
- Finance Ministers in a 2022 meeting discussed digital trade, digital payment, technical barriers as new areas for economic collaboration under AITIGA.
- Total imports of palm oil to India rose by 300% in 2022-23 under AITIGA concessions which aided ease of supply crunch and price inflation.
- India achieved its 2025 trade targets of $300 billion with ASEAN 2 years in advance in Dec 2022 indicating positive impact.
- India’s overall trade with ASEAN (goods & services) stands at $91.5 billion in 2023, as the world’s 7th largest, growing at 22% CAGR since 2015.
- A dedicated ASEAN-India Trade Portal was launched in 2023 to provide information on tariffs, imports classification, help exporters utilise FTA benefits.
- Talks are underway to expand into trade in services, investments and account for digitization, technology trends to maximize future opportunities.
- ASEAN partners conveyed need to simplify complex rules of origin norms and facilitation procedures which create bottlenecks for MSME traders.
- October 2022 study shows only 28% Indian exporters and 25% ASEAN exporters have effectively utilized AITIGA tariff cuts indicating more awareness is required.
The AITIGA agreement has strengthened economic ties between India and fast growing ASEAN countries based on trade in merchandise goods. With robust growth in 13 years across sectors, further potential exists in services and investments partnership. As ASEAN integrates as a cohesive bloc, deepening trade with India aids its Act East policy and Indo-Pacific footprint.
