India’s trade with ASEAN, the 10-member bloc has increased to more than U$130billion considered among the largest trading partners after USA.
However, during the 21st ASEAN-India Summit was held on 10 October, it was noted that India’s trade with the bloc remains skewed in deficit and expense which would need to be addressed.
The theme of the ASEAN-India Summit held last week was “Enhancing connectivity and Resilience.”
ASEAN and India together share 7 per cent of the world GDP and 26 per cent of the world population. Their combined strength is, therefore, phenomenal.
ASEAN is currently India’s 4th largest trading partner, and India is ASEAN’s 7th largest trade partner. ASEAN has truly become a global economy, where FTAs have been playing a key role in the integration.
However, there are some Critical Trade Issues experienced between India and the ASEAN including; unlike the EU, ASEAN is not a single market. India faces 10 different economies in market access.
Secondly, trade barriers are very high at borders and NTMs have been complicated and rising. An increase in NTMs could raise trade costs, inhibiting trade expansion and GVCs.
Besides, there are restrictions on the movement of professionals, capital, and goods.
On the other hand, ASEAN too faces several trade and investment barriers in India. Besides, ASEAN also faces rising tariffs and domestic protections.