Aifta Asean – India Free Trade Agreement

Combined with the continued development of ASEAN as a regional economic power, these figures, while still somewhat small, are on the rise thanks to the free trade agreements between India and ASEAN. Although the ASEAN-India Free Trade Agreement has many advantages, India is concerned that the agreement will have several negative effects on the economy. As has already been said, both regions are trying to reduce their tariffs on a large portion of their traded products. This will allow them to increase market access for their products. However, it is criticized that India is not experiencing as large an increase in market access to ASEAN countries as ASEAN in India. [9] ASEAN`s economies are largely export-oriented and have high export rates to GDP (in 2007, Malaysia had a rate above 100%[10]). [11] Given the above, as well as the global financial crisis and India`s expansionary domestic market, ASEAN countries are eager to consider India as the country of origin for its exports. [11] Positive relations were established at India-Cambodia`s first business forum, Exhibition and Buyer/Seller Meet in 2009, which aimed to improve economic engagement between the two countries. In the same year, India extended duty-free preferential tariff regimes to Cambodia. Indian businessmen in Cambodia have also established an Indian Chamber of Commerce to promote bilateral trade and investment relations. In addition, Indonesia and India signed a Memorandum of Understanding (MOU) in 2005 to establish a Joint Task Force (JSG) to examine the positive aspects of signing a Comprehensive Economic Cooperation Agreement (ECSC).

The ECSC must be an agreement that includes economic cooperation and trade in goods and services as well as investment, which would lead to a higher level of mutually beneficial economic cooperation between the two countries. The JSG forecasts that this ACA would bring total exports between India and Indonesia to $17.5 billion in 2020, with Indian exports reaching $7.8 billion and Indonesian exports at $9.7 billion.