What's Next for ASEAN-India Trade Relations? Insights from Modi's Recent Meetings

Modi's Engagements at the BRICS Summit

Rio de Janeiro: During the BRICS summit, Prime Minister Narendra Modi engaged in discussions with Malaysian Prime Minister Anwar bin Ibrahim regarding the ASEAN-India Free Trade Agreement (FTA).

The two leaders assessed the advancements in their bilateral relationship, focusing on trade, investment, defense, education, healthcare, tourism, and cultural exchanges, as stated by the Ministry of External Affairs (MEA) following their meeting.

Modi extended his congratulations to Malaysia for its effective leadership of the Association of Southeast Asian Nations (ASEAN), which comprises ten Southeast Asian nations.

He expressed appreciation for Malaysia's ongoing support in enhancing the ASEAN-India Comprehensive Strategic Partnership, particularly regarding the timely and successful review of the ASEAN-India FTA, according to the MEA.

This FTA was established in 2009 and came into effect in January 2010.

In August 2023, both nations announced plans to conduct a comprehensive review of the existing goods agreement by 2025.

However, it appears that negotiations for the FTA have stalled due to some disagreements between the two parties.

The review has been a long-standing request from Indian industries, which are eager for an updated agreement that addresses current trade imbalances and promotes a more equitable trading environment.

Post-implementation, India's exports to the ASEAN bloc were approximately USD 38-39 billion annually, while imports surged to USD 86 billion, as reported by Indian officials.

India is advocating for a review to remove trade barriers and prevent misuse of the agreement.

The ASEAN member states include Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar, and Cambodia.

Recently, at the India Global Forum in London, Commerce and Industry Minister Piyush Goyal remarked, "Fifteen years ago, our focus was on FTAs with competing nations. Entering an ASEAN agreement seemed counterproductive as it opened our market to competitors, many of whom are now closely aligned with China."

He further noted, "This indirectly allows goods from China to enter the Indian market."

During the meeting, Modi also expressed gratitude to Anwar for condemning the recent terror attack in Pahalgam and acknowledged Malaysia's support on shared concerns. The two leaders discussed collaboration in multilateral forums and regional security, as stated by the MEA.

Separately, Modi met with Cuban President Miguel Diaz-Canel Bermudez to explore ways to enhance bilateral relations in key sectors such as pharmaceuticals, biotechnology, traditional medicine, and digital public infrastructure.

"Our discussions covered a broad spectrum of topics. The economic ties between our countries hold significant potential for future growth," Modi shared on social media.

"Sectors like technology, healthcare, and energy are equally promising. The increasing acceptance of Ayurveda in Cuba is a positive development. We also talked about improving disaster management capabilities," he added.

The leaders reviewed their cooperation in economic partnerships, development initiatives, fintech, capacity building, science and technology, disaster management, and healthcare, according to the MEA.

"Recognizing India's strengths in the digital sector, President Diaz-Canel showed interest in India's Digital Public Infrastructure and UPI. Modi appreciated Cuba's acknowledgment of Indian pharmacopoeia, which will facilitate access to Indian generic medicines," the statement noted.

Both leaders agreed to collaborate on issues pertinent to the Global South, including health, pandemics, and climate change, and commended their cooperation in multilateral settings.