New Delhi: India and 10-nation grouping ASEAN may start their review process for the existing free trade agreement.fta), including issues related to market access and making rules of origin Extensive, an official said. comprehensive rules of origin The framework will help eliminate the scope for exporters from third countries to avail of concessional customs duties.
The FTA was signed in 2009 and entered into force in January 2010, and the current chapter on rules of origin (ROO) is not “very detailed” and was based on value addition Only in products, the official said.
Since it was based only on value addition, “we do not know whether any third country is using this agreement. But, we cannot rule out that possibility. Therefore, it is very important, and important for global value chains.” Because, we need to look at ROOs very differently because different regions behave differently. This is an important chapter,” the official said.
‘Rules of origin’ provisions set out the minimum processing that must take place in the FTA country, in order for the final manufactured product to be called a good originating in that country.
Under this provision, any country that has signed an FTA with India cannot dump goods from a third country into the Indian market just by putting a label on it. To export to India, it will have to add a specified value to that product. Norms of rules of origin help prevent dumping of goods.
“The existing agreement is in trade in goods and the main areas in it are market access and rules of origin. Therefore, we have said that we should first start talks on this and put forward our aspirations and issues,” the official said. ,
In manufactured productsDomestic value addition of 35 per cent of the FOB (cost at the border of the exporting country) price was made mandatory. Another condition for availing concessional tariff was that the final processing is carried out within the territory of the exporting country.
“We want to make the rules of origin in the agreement more detailed and product specific,” said the official, speaking on condition of anonymity. He added that product-specific rules are in talks with Australia to expand the existing trade agreement. About 6,000 tariff lines are being negotiated individually.
Value addition requirements are different for each product, and these values may not be the same for agricultural and manufactured products.
While agricultural products are mostly grown and processed locally, manufacturing takes place in global value chains.
The government has consulted with stakeholders from 7-8 sectors for the review.
India and ASEAN have agreed to expeditiously review the existing agreement in goods between the two regions and conclude the talks in 2025.
This was agreed during the twentieth AEM (ASEAN Economic Ministers)-India Consultative Meeting held in Semarang, Indonesia in August.
The Commerce Ministry has said that the review of ASEAN-India FTA (AITIGA) was a long-standing demand of Indian businesses and the early commencement of the review will help in making FTA trade convenient and mutually beneficial.
Both regions have agreed to make the agreement more user-friendly, simpler and trade-facilitating for businesses to enhance trade and support sustainable and inclusive growth.
India is seeking a review of the agreement with the aim of eliminating barriers and abuses of the trade deal.
ASEAN members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
In general, such review exercises involve issues of implementation, rules of origin; Verification process and consignment release; customs procedures; further liberalization of trade in goods; and sharing and exchange of business data.
Trade experts have said the demand for review is because India’s exports to ASEAN have been affected due to lack of reciprocity in FTA concessions, non-tariff barriers, import rules and quotas.
Concerns have also been raised about the routing of goods from third countries to India through ASEAN members taking tariff benefits of the agreement. ASEAN has a very close economic relationship with China through the ASEAN-China Trade and Goods Agreement.
During 2010–11, India’s exports to ASEAN increased to US$25.7 billion from US$18.11 billion in 2009–10. However, imports increased to US$30.6 billion in 2010–11 from US$25.8 billion in 2009–10.
Similarly, in 2022-23, India’s exports to ASEAN increased to US$ 44 billion from US$ 42.32 billion in 2021-22. However, imports increased to US$ 87.57 billion in 2022-23 as against US$ 68 billion in 2021-22.
The trade deficit has increased to US$ 43.57 billion in 2021-22 from US$ 25.76 billion in the previous fiscal year. In 2010-11 it was just US$5 billion.
The FTA was signed in 2009 and entered into force in January 2010, and the current chapter on rules of origin (ROO) is not “very detailed” and was based on value addition Only in products, the official said.
Since it was based only on value addition, “we do not know whether any third country is using this agreement. But, we cannot rule out that possibility. Therefore, it is very important, and important for global value chains.” Because, we need to look at ROOs very differently because different regions behave differently. This is an important chapter,” the official said.
‘Rules of origin’ provisions set out the minimum processing that must take place in the FTA country, in order for the final manufactured product to be called a good originating in that country.
Under this provision, any country that has signed an FTA with India cannot dump goods from a third country into the Indian market just by putting a label on it. To export to India, it will have to add a specified value to that product. Norms of rules of origin help prevent dumping of goods.
“The existing agreement is in trade in goods and the main areas in it are market access and rules of origin. Therefore, we have said that we should first start talks on this and put forward our aspirations and issues,” the official said. ,
In manufactured productsDomestic value addition of 35 per cent of the FOB (cost at the border of the exporting country) price was made mandatory. Another condition for availing concessional tariff was that the final processing is carried out within the territory of the exporting country.
“We want to make the rules of origin in the agreement more detailed and product specific,” said the official, speaking on condition of anonymity. He added that product-specific rules are in talks with Australia to expand the existing trade agreement. About 6,000 tariff lines are being negotiated individually.
Value addition requirements are different for each product, and these values may not be the same for agricultural and manufactured products.
While agricultural products are mostly grown and processed locally, manufacturing takes place in global value chains.
The government has consulted with stakeholders from 7-8 sectors for the review.
India and ASEAN have agreed to expeditiously review the existing agreement in goods between the two regions and conclude the talks in 2025.
This was agreed during the twentieth AEM (ASEAN Economic Ministers)-India Consultative Meeting held in Semarang, Indonesia in August.
The Commerce Ministry has said that the review of ASEAN-India FTA (AITIGA) was a long-standing demand of Indian businesses and the early commencement of the review will help in making FTA trade convenient and mutually beneficial.
Both regions have agreed to make the agreement more user-friendly, simpler and trade-facilitating for businesses to enhance trade and support sustainable and inclusive growth.
India is seeking a review of the agreement with the aim of eliminating barriers and abuses of the trade deal.
ASEAN members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
In general, such review exercises involve issues of implementation, rules of origin; Verification process and consignment release; customs procedures; further liberalization of trade in goods; and sharing and exchange of business data.
Trade experts have said the demand for review is because India’s exports to ASEAN have been affected due to lack of reciprocity in FTA concessions, non-tariff barriers, import rules and quotas.
Concerns have also been raised about the routing of goods from third countries to India through ASEAN members taking tariff benefits of the agreement. ASEAN has a very close economic relationship with China through the ASEAN-China Trade and Goods Agreement.
During 2010–11, India’s exports to ASEAN increased to US$25.7 billion from US$18.11 billion in 2009–10. However, imports increased to US$30.6 billion in 2010–11 from US$25.8 billion in 2009–10.
Similarly, in 2022-23, India’s exports to ASEAN increased to US$ 44 billion from US$ 42.32 billion in 2021-22. However, imports increased to US$ 87.57 billion in 2022-23 as against US$ 68 billion in 2021-22.
The trade deficit has increased to US$ 43.57 billion in 2021-22 from US$ 25.76 billion in the previous fiscal year. In 2010-11 it was just US$5 billion.
(TagstoTranslate)Trade News(T)Value Addition(T)Rules of Origin(T)Market Access(T)Manufactured Products(T)India-ASEAN Trade Agreement(T)FTA(T)Comprehensive Rules of Origin