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17th ASEAN-India Economic Ministers Consultations held

17th ASEAN-India Economic Ministers Consultations held

   Kautilya Academy    31-08-2020

The ASEAN-India Economic Ministers Consultations was held virtually. India was represented by the Union Minister of Commerce and Industry Shri Piyush Goyal.

Highlights

The meeting was attended by the commerce ministers of the 10 ASEAN countries. This included Malaysia, Thailand, Laos, Vietnam, Indonesia, Singapore, Brunei, Myanmar, Cambodia, and the Philippines. The leaders at the meet reaffirmed their commitment in the following

  • To ensure financial stability
  • Resilient supply chain
  • The unimpeded flow of essential goods and medicines

The ASEAN-India Business Council report was submitted during the meeting. The report had recommended reviewing the AITIGA. ANTIGA is ASEAN India Trade in Goods Agreement.


What is AITIGA?

The AITIGA is a free trade agreement between the ten ASEAN members and India. It was signed in 2010. According to the agreement, the partners have set a timeline to eliminate duties on as many goods as possible.


Why is the review needed?

  • Since the agreement was implemented India’s trade deficit has increased. Thus, India is demanding a review. According to NITI Aayog, the trade deficit between India and ASEA has doubled between 2011 and 2017. It was 5 billion USD in 2011 and increased to 10 billion USD in 2017.
  • The main reason for the growing trade deficit is the low utilization of the FTA route by the Indian traders.

Act East Policy

The ASEAN-India partnership is predominantly occupied by India’s Act East policy. The Act East Policy is an up-gradation of the Look East Policy that was launched in 1991. The Act East Policy was launched in 2014 by PM Modi to boost security and economic ties between India and Indo-Pacific. Earlier the Look East Policy focused only on economic ties.

It is important for India to focus on security ties in the Indo Pacific in order to strengthen its maritime relations. This is because the Chinese are increasing their influence in the region. Several of these ASEAN countries have concerns over the Chinese influence in the region.

Thus, ASEAN is highly important for India.


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