India and ASEAN agree to review goods trade pact by 2025 to fix ‘asymmetry’

Subject :IR

Section: International Groupings

Context:

India and a 10-member bloc of South-East Asian nations have agreed to review their free trade agreement, signed in 2009.

More about the news:

India and ASEAN nations have agreed to review their free trade pact for goods by 2025.
The focus of the review is on addressing trade imbalances.
The Joint Committee of the ASEAN-India Trade in Goods Agreement has finalized terms for negotiations.
The review’s progress will be discussed at the India-ASEAN Leaders’ Summit in September.

More about ASEAN:

The Association of Southeast Asian Nations is a regional organization which was established to promote political and social stability amid rising tensions among the Asia-Pacific’s post-colonial states.
ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration i.e Bangkok Declaration
The motto of ASEAN is “One Vision, One Identity, One Community”.
The ASEAN Secretariat is located in Jakarta.

Some facts about ASEAN:

It is the 3rd largest market in the world, larger than the EU and North America.
It is the 6th largest economy in the world, 3rd in Asia.
The Fourth most popular investment destination globally
It is the 4th largest trading partner of India.
India and ASEAN registered a bilateral trade of US$ 131.5 billion in 2022-2023.

ASEAN-INDIA FTA:

India had signed an FTA in goods with the regional bloc in 2009, known as the Asean–India Free Trade Agreement (AIFTA). The trade in goods pact came into force from January 2010.
In 2014, an FTA in services was also included.

What is FTA:

It is a pact between two or more nations to reduce barriers to imports and exports among them.
Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
FTAs can be categorized as Preferential Trade Agreements, Comprehensive Economic Cooperation Agreement (CECA) and Comprehensive Economic Partnership Agreements (CEPA).
India has signed 13 Free Trade Agreements (FTAs) with its trading partners, including the 3 agreements, namely India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA), India-UAE Comprehensive Partnership Agreement (CEPA) and India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) along with 6 limited coverage Preferential Trade Agreements (PTAs).