India Weighs Tariff Cuts As ASEAN Pushes For Greater Market Access

New Delhi, Jul 7 (KNN) ASEAN member countries are seeking greater tariff concessions from India as negotiations to review the ASEAN-India Trade in Goods Agreement (AITIGA) gather pace.

At the same time, New Delhi is considering calibrated tariff reductions in exchange for improved market access for Indian exports.

ASEAN Seeks Lower Tariffs in AITIGA Review

The Department of Commerce is consulting industry stakeholders to identify products where import duties can be reduced or eliminated without adversely affecting domestic manufacturers, reported The Hindu. 

While ASEAN countries have acknowledged India's concerns over its widening trade deficit with the bloc and are open to improving market access for Indian goods, they are also seeking lower tariffs on select exports to India.

India Weighs Tariff Cuts Against Market Access

India's trade deficit with ASEAN widened to USD 45.2 billion in FY25 from around USD 7 billion when the trade agreement came into force in 2010. 

Experts attribute the increase to relatively lower tariff reduction commitments by some ASEAN members, including Thailand and Vietnam, as well as limited utilisation of the agreement by Indian exporters.

As part of the review, the Commerce Department has shortlisted products considered relatively less sensitive for domestic industry. 

Many of these products have already been liberalised under India's other free trade agreements, while India's export position in these categories remains stronger than that of ASEAN countries.

Industry feedback will help determine the products that could be offered for deeper tariff liberalisation under the revised agreement.

India Pushes for Stronger Rules of Origin

India is also seeking stronger safeguards on rules of origin to prevent the alleged routing of low-cost Chinese goods into the Indian market through ASEAN countries.

Speaking recently, Ministry of External Affairs Secretary (East) Rudrendra Tandon said the review aims to update the agreement to reflect current economic realities and facilitate greater liberalisation on both sides.

He noted that the objective is to expand market access for businesses in India and ASEAN while ensuring that any revisions to the agreement receive the consensus of all ten ASEAN member countries.

(KNN Bureau)