The Indian Government is reviewing the utilization of the ASEAN-India Trade in Goods Agreement (AITIGA) as the utilisation rate of this Agreement among businesses is less than 50 per cent, especially in chemical and plastic exports to Thailand. The aim is to remove barriers and prevent abuse of the FTA.

New Delhi, May 24 – India’s Ministry of Commerce and Industry revealed that utilisation rate of preferential tariff under the ASEAN–India Trade in Goods Agreement (AITIGA), signed in 2009 and effective since 2010, remains below 50%, especially for key exports like chemicals and plastics to Thailand. Many exporters still pay most-favoured nation (MFN) rates of 3–30% instead of claiming the duty-free benefits under AITIGA.

An official explained, “AITIGA offers lower preferential rates compared to Thailand’s MFN tariffs. We have asked why businesses have not utilised this benefit for their exports.” Among the ten ASEAN member countries – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam – 5 countries namely Indonesia, Singapore, Malaysia, Thailand và Viet Nam account for 92.7% of India’s exports to ASEAN and 97.4% of imports from the bloc.

India’s Ministry of Commerce and Industry is reviewing this AITIGA Agreement to eliminate barriers and curb misuse of the pact. There are also concerns about goods being routed from third countries through ASEAN members to into India to exploit preferential duties. Under AITIGA, both sides agreed to progressively eliminate duties on some 75% of goods and reduce tariffs on another 15%, but tariff-elimination commitments vary by country.