NEW DELHI: India has been pressing the Association of Southeast Asian Nations (Asean) for the review of the Asean-India Trade in Goods Agreement because of concerns about its impact on the development of domestic manufacturing, external affairs minister S Jaishankar said on Thursday.
The Modi government has been “very cautious” on free trade agreements (FTAs) because of the experiences and results of past trade deals and concerns about the impact of such agreements on MSMEs, Jaishankar told an event organised by the Associated Chambers of Commerce & Industry of India (Assocham).
“We have been pressing very strongly for a review of the Asean-India Trade in Goods Agreement (AITIGA) because we have concerns about the impact of that FTA on the development of manufacturing in India, and we feel that FTA should not become damaging to the Indian economy,” he said.
“We believe today that the performance of that FTA, and the time period which has elapsed, justifies a review and we have been pushing for that very strongly.”
The sixth meeting of the AITIGA joint committee for reviewing the FTA was held in New Delhi on November 21-22. The joint committee includes eight sub-committees that are negotiating issues such as market access, rules of origin, customs procedures and trade remedies, and an official readout from the Indian side said the sub-committees made “good progress in textual discussions” and covered some ground towards initiating tariff negotiations.
{{/usCountry}}The sixth meeting of the AITIGA joint committee for reviewing the FTA was held in New Delhi on November 21-22. The joint committee includes eight sub-committees that are negotiating issues such as market access, rules of origin, customs procedures and trade remedies, and an official readout from the Indian side said the sub-committees made “good progress in textual discussions” and covered some ground towards initiating tariff negotiations.
{{/usCountry}}The Asean-India economic ministers meeting in September and the Asean-India Summit in October said the leadership of both sides urging the AITIGA joint committee to expedite negotiations and work towards concluding the review in 2025.
Jaishankar said the FTAs that India negotiated with the United Arab Emirates (UAE), Mauritius and the European Free Trade Association (EFTA), and the early harvest deal concluded with Australia had been structured in such a way that they didn’t have negative impacts on crucial sectors such as agriculture or affect MSMEs.
He described the negotiations for FTAs with the European Union (EU) and the UK as complex because they involved many non-trade issues. “In the case of the EU, because there are multiple members, everybody has their interests. So how to harmonise it? That’s a challenge as well,” he said.
“But, overall we believe that this will benefit us. They will improve our market access. These are mature, high-demand, high-value, predictable [and] stable markets. From an economic standpoint, we should definitely put great effort into improving our access with Europe and with North America.”
Noting that the risk factors are much less in Europe and North America than in many other parts of the world, Jaishankar said: “These will be tough negotiations... The world is not an easy place, but we are quite committed.”