India and the ten-member ASEAN have agreed to initiate a review of the bilateral free trade agreement (FTA) in goods to make it “more user-friendly, simple and trade facilitative”.

“The Ministers tasked officials to work on the details of the review and submit an update at the next Asean Economic Ministers (AEM)-India Consultations,” as per the joint statement issued at the end of the on-going AEM-India Consultations in Bangkok this week.Commerce & Industry Minister Piyush Goyal represented India in the meet.

India is not happy about the fact that its trade deficit has increased with the ASEAN significantly since the pact was implemented in January 2010. A Niti Aayog study reveals that India’s trade deficit with the ASEAN doubled to $10 billion in 2017 from $5 billion in 2011.

One of the reasons for the growing deficit is the low utilisation of the FTA route by Indian exporters to ASEAN countries because of difficulties faced in negotiating the rules.

A review of the India-ASEAN FTA could help to improve utilisation in India by making the pact simpler and more user-friendly as stated.

In the joint statement, the Ministers welcomed the recommendations of the ASEAN-India Business Council to further promote the potential of bilateral trades through the utlisation of ASEAN-India FTA as well as cooperation in some areas of mutal interest such as financial technolgoy, connectivity, start-ups and innovation empowerment of youth and women and MSME development.

The Ministers also expressed their support for the fourth ASEAN-India Business Summit and Business Excellence Award, which will be in Manila next month.

Based on preliminary ASEAN data, two-way goods trade with India grew by 9.8 per cent from $73.6 billion in 2017 to $80.8 billion in 2018.