New Straits Times (08/10/2025) - AS the global economic environment rapidly changes, Asean's efforts to strengthen trade agreements with key economies becomes more urgent.

During Malaysia's Asean chairmanship in 2025, a key priority is the Asean-India Trade in Goods Agreement (AITIGA), which is currently under review. India has been an Asean dialogue partner since 1996. 

AITIGA came into force on Jan 1, 2010, creating one of the world's largest free trade areas. This highlights the importance of fortifying the Asean-India relationship. 

Against a backdrop of rising protectionism, evolving Indo-Pacific alliances and Asean's pursuit for deeper economic integration, both parties have reaffirmed their commitment to concluding a 'modern and mutually beneficial' agreement ahead of the October Asean-India Summit. 

Investment, Trade and Industry Ministry deputy secretary-general (trade) Mastura Ahmad Mustafa shares some key developments.

Q: Madam Deputy Secretary General (Trade), the negotiations for the Asean-India Trade in Goods Agreement (AITIGA) Review have been ongoing for some time now. Could you briefly update on where negotiations are at the moment now?

A: Asean has completed 10 rounds of the AITIGA Review negotiations with India, with this year alone four rounds have been convened in upgrading the agreement with the view to ensure it remains relevant, modern and trade facilitative for businesses.

ASEAN'S CONSTRUCTIVE STANCE

Q: You mentioned India's public discourse over potential imbalances and third-party misuse on the agreement. What is Asean's position and how does it balance the interests of all parties?

A: Asean's position is grounded in partnership, avoiding tit-for-tat rhetoric. Asean leaders have continually affirmed the value of the Asean-India relationship and India's "Act East" commitment.

In fact, at the 21st Asean-India Summit in Vientiane, Laos on Oct 10, 2024, leaders praised India as a close neighbour and trustworthy partner, emphasising a shared vision of peace, stability and prosperity for the region.

Similar constructive spirit was shared by the Asean Economic Ministers (AEM) during the AEM-India Consultations in 2023 and 2024, where ministers reaffirmed that the outcome of the AITIGA review must be mutually beneficial, commercially meaningful, user-friendly and trade-facilitative.

Throughout Malaysia's chairmanship, the AEM made calls to expedite negotiations and substantially conclude the review by 2025.

ADDRESSING CONCERNS THROUGH COOPERATION

Q: What are the challenges since AITIGA took effect, and how does Asean collectively address them?

A: Asean recognises the challenges and perceptions of imbalance which fuelled criticism in India. India's imports from Asean grew faster than its exports, contributing to India's trade deficit with Asean. Concerns were also raised on non-tariff barriers in Asean and the Rules of Origin enforcement. Asean acknowledges these issues, and is utilising the AITIGA review negotiations to address implementation issues and trade concerns.

Multiple discussions took place across the eight sub-committees set up for the AITIGA review. These expert groups, covering areas such as market access, rules of origin, standards and conformity, trade remedies and legal and institutional issues, are tackling the points of friction. This will ensure the pact's benefits genuinely accrue to producers in India and Asean, while addressing concerns on transshipment of third-country goods. 

The review of the agreement also enables both parties to streamline Customs procedures, align standards, improve transparency on non-tariff measures and import regulations, as well as have closer economic cooperation and technical cooperation that will benefit both regulators and businesses including micro, small and medium enterprises (MSMEs).

Ultimately, we want to minimise the hurdles for both Asean and Indian markets.

ASEAN'S COMMITMENT TO A MODERNISED, MUTUALLY BENEFICIAL OUTCOME 

Q: Given Asean's proactive efforts and India's receptiveness, when are negotiations expected to conclude? Are you optimistic that a balanced outcome can be reached?

A: Asean remains confident of substantially concluding a high-quality review by end-2025, in line with the target set by the Leaders and Economic Ministers of Asean and India. The very mandate of the review, agreed in 2019 and launched in 2022, was to make the agreement more trade-friendly and mutually beneficial given current global trade realities.

Under Malaysia's Asean chairmanship this year, the AITIGA joint committee has convened over four rounds, most recently in New Delhi, India, and numerous intersessional meetings of the AITIGA sub-committees to resolve any gaps in negotiations.

Asean negotiators enter each session with optimism, drawing confidence from the comprehensive strategic partnership and trust that Asean and India have built for the past 30 years. The cooperative mechanisms are already in place, for example the re-energised Asean-India Business Council (AIBC) which feeds private sector input, ensuring the outcomes address real business needs.

Additionally, Asean commissioned an independent study to gauge new areas of growth and collaboration. There is also broad consensus within the past nine rounds of negotiations. Asean and India seek to boost MSMEs participation and expand cooperation to include digital economy, green economy and the deepening of common supply chains. The review is expected to include updated chapters enabling these priorities to propel trade into new areas of growth.

Crucially, Asean is committed to a win-win result and is open to fine-tuning tariff commitments or strengthening provisions to curb abuse and continue spurring trade. The anticipated outcome is a balanced upgrade of AITIGA, preserving core concessions while instituting better safeguards and reciprocity. It is this balance that Asean is striving for.

Q: What is your outlook on Asean-India economic relations? Will the negotiations likely strain or strengthen relations?

A: The Asean-India partnership has weathered storms before. We are just done having our 40th Asean Senior Economic Officials Meeting (SEOM)-India Consultation in August and looking forward to the upcoming 22nd AEM-India Consultation taking place later this month.

These ongoing discourse and exchanges with India within Asean Economic Community platform spanning many years is a testament to the close economic ties we share with India within the global trade sphere. The AITIGA review is no different. Asean entered the AITIGA review negotiations with optimism that a more dynamic and mutually beneficial agreement is within reach. Asean will always stay above the fray, choosing to respond through actions and results. A rebalanced Asean-India trade pact can usher in another decade of shared prosperity.

The existing AITIGA already supports billions in trade, jobs and cross-border investments. These gains should not be wasted. We are confident that with positive engagement, the review will conclude with a mutually beneficial outcome. In partnership with India, Asean is ready to make that vision a reality.

Tangible gains a convincing response to naysayers

Asean's consistent approach has already led to tangible outcomes. Investment, Trade and Industry Ministry deputy secretary-general (trade) Mastura Ahmad Mustafa said the best rebuttal to public criticism is the track record of AITIGA itself.

Since 2010, the pact has unlocked one of the world's largest free trade areas, a market of over two billion people with a combined gross domestic product (GDP) around US$7.4 trillion in 2023.

Tariffs on a huge list of traded goods were slashed or eliminated, spurring commerce from palm oil to machinery to textiles. The results are evident in the surge of trade and investment flows between Asean and India.

EXPONENTIAL GROWTH IN BILATERAL TRADE

Since 2009, trade between Asean and India grew from about US$21 billion in 2006 to US$106.9 billion in 2024, reflecting a deal that has generated mutual demand and benefit.

INCREASED MARKET ACCESS FOR INDIAN PRODUCERS

The agreement opened up a market of 700 million consumers across 10 Asean economies to Indian exporters. Pharmaceutical, automobile, electronics, textile and agricultural products from India enjoy broad tariffs and quota-free preferential access to the Asean market.

Meanwhile, Asean's exports to India, including electronics, palm oil, rubber and specialty manufactures, find a thriving market.

INVESTMENT AND ENTERPRISE

Since AITIGA's inception, Asean has emerged as one of India's top sources of foreign direct investment (FDI). In 2018 and 2019, investment inflows from Asean (led by Singapore, Thailand and Malaysia) reached US$16.4 billion, nearly 37 per cent of India's total FDI during that period, supporting key sectors like finance, real estate and telecommunications.

Indian firms are also deeply embedded in telecommunications, infrastructure and digital sectors around Asean, reaching US$3.3 billion, making India Asean's 10th largest source of FDI last year.

COMPLEMENTARY, NOT COMPETITIVE ECONOMIES

The interweaving of supply chains brought by the AITIGA increased trade synergies by reducing tariffs and simplifying rules of origin. It enables collaboration between India's key sectors such as pharmaceuticals, information technology, chemicals, agro-products, and Asean's strengths in electronics, manufacturing and palm oil.

For example, Asean-made auto parts are fed into India's supply chains while Indian generic medicines enhance healthcare across Asean markets. These concrete outcomes illustrate that AITIGA has delivered real economic value for both sides as India was Asean's eighth largest trading partner in 2024 and Asean remains firmly among India's top trading partners.

It has created jobs, lowered prices for consumers, and given small businesses access to new markets. This is the legacy that Asean is determined to preserve and enhance through the constructive review of the AITIGA.

Read more at https://www.nst.com.my/business/2025/10/1289860/mutually-beneficial-asean-india-cooperation