India and Malaysia Vow to Fast-Track AITIGA Review in Bid to Boost ASEAN-India Trade
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Photo Credit: IANS |
Quick Read Summary
- Commerce Minister Piyush Goyal met Malaysia’s Trade Minister Tzafrul Aziz to discuss accelerating the ASEAN-India Trade in Goods Agreement (AITIGA) review.
- Both sides also reviewed the India-Malaysia Comprehensive Economic Cooperation Agreement (CECA).
- PM Modi and Malaysian PM Anwar Ibrahim also emphasized timely completion of the AITIGA review during the BRICS Summit in Rio de Janeiro.
- AITIGA, signed in 2009, has driven trade growth between India and ASEAN, now valued at $121 billion (2023–24).
- The review aims to modernize the pact, address trade imbalances, and enhance regional integration.
New Delhi, July 10 — India and Malaysia have reaffirmed their commitment to expedite the ongoing review of the ASEAN-India Trade in Goods Agreement (AITIGA), a key trade pact that has significantly shaped economic engagement between India and Southeast Asian nations since its inception in 2009.
In a meeting held on Thursday, India’s Commerce and Industry Minister Piyush Goyal and Malaysia’s Minister of Investment, Trade and Industry, Tengku Zafrul Aziz, discussed bilateral cooperation and reviewed progress on the AITIGA as well as the India-Malaysia Comprehensive Economic Cooperation Agreement (CECA).
“Looking forward to fast-tracking discussions with ASEAN member states to ensure fair trade and balanced growth,” Goyal posted on X (formerly Twitter) following the meeting.
Malaysia plays a crucial role as India’s permanent coordinator for economic matters within ASEAN, making the bilateral dialogue particularly significant in the context of ongoing trade negotiations.
Modi, Anwar Reaffirm Support During BRICS Summit
Earlier this week, on the sidelines of the BRICS Summit in Rio de Janeiro, Prime Minister Narendra Modi held talks with his Malaysian counterpart Anwar bin Ibrahim, where the two leaders echoed similar sentiments on regional trade integration.
According to an official release, PM Modi congratulated Malaysia for its stewardship of ASEAN and welcomed its support for a strengthened ASEAN-India Comprehensive Strategic Partnership. He further emphasized the importance of the timely and successful completion of the AITIGA review, calling it essential for future-proofing economic ties in the Indo-Pacific region.
AITIGA: A Trade Pact in Transition
The ASEAN-India Trade in Goods Agreement, signed in 2009 and implemented from January 1, 2010, was a landmark step toward enhancing India’s economic footprint in Southeast Asia. The agreement aims to reduce tariffs, eliminate trade barriers, and promote greater market access between India and the ten ASEAN member states:
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam
While the agreement initially focused on trade in physical goods, subsequent negotiations have included services and investments—covered under separate agreements signed in 2014.
In the fiscal year 2023–24, bilateral trade between India and ASEAN countries reached $121 billion, underscoring ASEAN’s role as one of India’s largest trading partners.
Why Is the AITIGA Review Important?
The review of AITIGA was formally launched in September 2022 after persistent calls from Indian industry bodies seeking to address:
- Trade imbalances with certain ASEAN nations
- Inverted duty structures
- Non-tariff barriers restricting Indian exports
Indian manufacturers and exporters have often voiced concerns that the agreement, in its current form, benefits ASEAN disproportionately due to India's relatively open market access without reciprocal benefits.
“This review provides a timely opportunity to align the agreement with contemporary trade realities, address market access concerns, and ensure mutual benefit,” said a senior official from the Ministry of Commerce.
The review process is expected to result in updated rules of origin, stricter safeguards, and improved transparency in regulatory measures.
Malaysia’s Role as a Key Trade Partner and Facilitator
Malaysia’s position as India’s ASEAN economic coordinator gives it significant influence in shaping consensus among the ten member countries. India’s bilateral trade with Malaysia alone stood at $19.4 billion in FY 2023–24.
Malaysia has consistently shown support for balanced trade frameworks that not only enhance ASEAN’s access to India’s growing market but also respect India’s demand for fair and reciprocal arrangements.
“Malaysia’s continued commitment to inclusive trade frameworks makes it a vital partner in steering the AITIGA review towards a mutually beneficial outcome,” said trade analyst Dr. R. Kumar.
Implications for Regional Trade and Geopolitics
The successful completion of the AITIGA review is seen as a litmus test for India’s Act East Policy and its ambition to play a leading role in the Indo-Pacific economic architecture. With China’s economic dominance in the region, India’s ability to create equitable trade partnerships is seen as a counterbalance strategy.
At the same time, India’s withdrawal from the Regional Comprehensive Economic Partnership (RCEP) in 2019 has amplified the need for it to strengthen and modernize its existing FTAs, especially with fast-growing economies in Southeast Asia.
The Road Ahead
The next round of technical-level AITIGA review talks is expected to take place later this year, with both sides indicating urgency.
“We are committed to ensuring that the agreement evolves to serve current economic priorities, while continuing to support ASEAN-India integration,” Goyal stated.
Officials suggest that the revised agreement could be finalized by mid-2026, subject to consensus among all ASEAN nations and alignment with domestic industrial expectations in India.
Reader Takeaway
The renewed momentum between India and Malaysia to push forward the AITIGA review signals a strategic effort to balance trade, modernize outdated provisions, and deepen economic cooperation in the Indo-Pacific region. As geopolitical and economic landscapes evolve, India is positioning itself not just as a consumer market but as a proactive architect of fair and sustainable trade relationships with ASEAN.