In January 2010 India’s Free Trade Agreement with the Association of Southeast Asian Nations (ASEAN) became operational with Singapore, Malaysia and Thailand. India had signed the Free Trade Agreement (FTA) in goods with ASEAN in August 2009. The FTA provides for the elimination of tariffs on about 80 percent of the traded goods by 2016. India has specified a ‘negative list’ of items to be excluded from the list of tariff concessions and a ‘sensitive list’ for which tariffs will be reduced to 5 per cent. For ‘special products’ like crude and refined palm oil, tea, coffee, and pepper, tariffs will be brought down to levels between 37.5 to 50 per cent by 2019. The FTA also provides for bilateral safeguards against a sudden surge of imports.
Key Points
- Regional and bilateral deals are increasingly important for New Delhi
- ASEAN will be a vital hub for India’s regional integration
- India is playing catch-up with China in ASEAN
- Modest export gains for India are balanced against expectations of gains from future services and investment agreement
- Globally, India ranks among the top ten service exporting nations; ASEAN is among the largest services importers
- The Indian government has been slow to take up farmers’ domestic concerns
- The most important gains in India’s image are at the regional level
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By Amita Batra, Jawaharlal Nehru University
