ASEAN and India signed the ASEAN-India Trade in Goods (TIG) Agreement in Bangkok on 13 August 2009, after negotiating for six years. The ASEAN-India TIG Agreement came into effect on 1 January 2010. The 7th ASEAN-India Summit in Cha-am Hua Hin, Thailand on 24 October 2009 agreed to revise the bilateral trade target to 70 billion USD to be achieved in the next two years, noting that the initial target of USD 50 billion set in 2007 surpassed soon.
ASEAN and India are currently working towards the early conclusion of the ASEAN-India Trade in Services and Investment Agreements.
The signing of the ASEAN-India Trade in Goods Agreement broke the ice for way for the creation of one of the world’s largest FTAs – a market of almost 1.8 billion people with a combined GDP of US$ 2.8 trillion. The ASEAN-India FTA will see tariff liberalization of over 90 percent of products traded between the two dynamic regions, including the so-called “special products,” such as palm oil (crude and refined), coffee, black tea and pepper. Tariffs on over 4,000 product lines will be eliminated by 2016, at the earliest.
India and ASEAN have signed a Trade in Goods Agreement on 13th August, 2009, which is envisioned to come into power with effect from 1st January, 2010. During the ASEAN-India Free Trade Agreement (FTA) negotiations, domestic consultations were held through various rounds of inter-ministerial meetings and stakeholder dialogues.
The Agreement will lead to growth in two-pronged trade and investment which will result in economic welfare gains to India. Indian exporters of machinery &machine parts, steel & steel products, oilcake, wheat, buffalo meat, automobiles & auto components, chemicals, synthetic textiles, etc. would gain additional market access into the ASEAN countries. Indian manufacturers would be able to source transitional products at competitive prices from the ASEAN markets for further reprocessing and export.
Between 1993 and 2003, ASEAN-India bilateral trade grew at an annual rate of 11.2%, from US$ 2.9 billion in 1993 to US$ 12.1 billion in 2003.
In 2008, the total volume of ASEAN-India trade was US$ 47.5 billion. ASEAN’s export to India was US$ 30.1 billion – a growth of 21.1 per cent in comparison with that of 2007. ASEAN’s imports from India were US$ 17.4 billion – a growth of 40.2 per cent in comparison to that of 2006. As for foreign direct investment (FDI), the inflow from India to ASEAN Member States was US$ 476.8 million in 2008, accounting for 0.8 per cent of total FDI in the region. Total Indian FDI into ASEAN from 2000 to 2008 was US$ 1.3 billion.