ASEAN-India Trade Deal Makes Visible Progress

By Rosemarie Khoo Mohd Sani

KUALA LUMPUR, Sept 25 (Bernama) -- ASEAN and India’s effort to upgrade the ASEAN-India Trade in Goods Agreement (AITIGA) has made visible progress after nine negotiating rounds, and the pathway to a substantial conclusion by end-2025 is still open.

"A phased approach could unlock progress -- delivering an ‘early harvest’ package focused on customs digitisation, advance rulings and single-window connectivity, while leaving the most sensitive tariff lines to longer glide paths," said SPI Asset Management managing director Stephen Innes.

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He added that a reworked rules-of-origin framework, allowing self-certification for trusted traders and risk-based audits, would also reduce border frictions.

However, like any other trade negotiations, AITIGA has its own challenges, especially in headline tariff cuts and more in the “plumbing” of trade.

"Rules of origin continue to be a sticking point - India insists on tighter enforcement to prevent third-country transhipment, while ASEAN exporters want predictability and simplified procedures. 

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"Without alignment here, every shipment risks a replay of old disputes," he told Bernama.

Innes noted that non-tariff barriers are another challenge, as many are embedded in domestic regulation such as licensing, standards and testing regimes, which cannot be resolved with a single free trade agreement (FTA) clause. 

Progress, he said, requires regulator-to-regulator cooperation and time-bound work plans.

Sensitive sectors, such as automotive, agriculture, and steel, add political weight, with industry groups on both sides lobbying to shield local producers, thereby dampening the willingness to make trade concessions.

As co-chair for the AITIGA Joint Committee, Malaysia could play a catalytic role by tightening process discipline and convening supply-chain roundtables to feed pragmatic solutions directly into the talks, he said.

"Ultimately, success will hinge on turning negotiations from broad ambition into operational fixes that businesses actually feel at the border," said Innes.

In July 2025, India’s High Commissioner to Malaysia, B N Reddy told Bernama that the ongoing review of the AITIGA, which began in 2023 and is expected to conclude by year-end, is set to further enhance regional trade and investment, particularly in the digital economy.

One of the key objectives is to make trade more effective, user-friendly and simpler for businesses, he said.

India has been a leading trade partner of ASEAN, with total trade increasing to US$106.83 billion in 2024 from US$100.72 billion in 2023. 

However, foreign direct investment from India to ASEAN fell 34.97 per cent to US$3.31 billion in 2024, from US$5.09 billion in 2023.

-- BERNAMA