Trade pact with ASEAN was a 'silly' move, claims Minister Piyush Goyal

Commerce and industry minister Piyush Goyal on Thursday said that it was “silly” on India’s part to sign free trade agreements with the Association of Southeast Asia Nations (ASEAN) that opened Indian markets to competing economies. 

Goyal criticises pact with ASEAN

Speaking at the Future Frontiers Forum in London, Goyal questioned the rationale behind the previous government’s 2010 ASEAN-India Free Trade Agreement (AITIGA), arguing that it exposed India to indirect Chinese imports and created an uneven trade relationship.

According to Goyal, the previous government entered into trade pacts without adequately assessing their long-term impact.

“There was a time 15 years ago when we were more focused on doing trade agreements with countries who were really our competitors. Why do an ASEAN agreement…which was done 15 years ago before we came into government, it really is silly because I am opening up my market to my competitors,” he said.

“Many of whom (developing countries with which India entered into FTAs) have now become the B team of China. So effectively, I have opened up my markets for goods that find their way from China into India,” Goyal said at the Future Frontiers Forum in London.

Incidentally, this is the most candid statement from a senior NDA government functionary, condemning the FTA with ASEAN.

The ASEAN-India Trade in Goods Agreement (AITIGA) became operational in 2010, during the UPA-II government. 

Since then, India’s trade deficit with ASEAN widened from $4.98 billion in 2010-11, the first full year of operation of AITIGA, to $44.20 billion in 2024-25. India’s exports to the region fell 5.77% on-year in 2024-25 to $38.96 billion while imports grew 5.65% to $84.16 billion.

Which are the ASEAN countries?

ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

Within five years of the agreement on goods being activated, India asked for a review of the pact as its imports from ASEAN surged, but it could not derive the expected benefits.

India maintains that its exports to ASEAN have been impeded by non-reciprocity in FTA concessions, non-tariff barriers, import regulations and quotas.

Another Indian demand is strict adherence to the Rules of Origin provisions of the agreement by ASEAN.

The review of the AITIGA is in progress, and both sides have committed to completing the process by the end of this year. Along with the ASEAN FTA, the review of trade agreements with South Korea and Japan is also in process.

Goyal shared how India’s vision has changed. He mentioned “robust trade agreements with the developed world, as we did with Australia, and are now negotiating with New Zealand in another 3-4 months.”

He talked about the agreement with the United Arab Emirates (UAE), the UK and four European Free Trade Association (EFTA) countries.

“What we did with the UK and four European Free Trade Association (EFTA) countries and are in active dialogue with the EU. We are in dialogue with the USA, we are in dialogue with Peru and Chile. Countries against whom we do not compete but complement. Where they have certain things to offer that India will love to have and we have certain things on offer which do not hurt their economies,” Goyal added.

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