India’s review of its free trade agreement with the ASEAN bloc has hit a wall, with nine rounds of renegotiation under the ASEAN-India Trade in Goods Agreement (AITIGA) showing little progress, government sources told NDTV Profit.

India had opened 71% of its tariff lines under AITIGA, despite having a significantly lower per capita income compared to ASEAN members. In contrast, Indonesia opened only 41%, Vietnam 66.5%, and Thailand 67%, giving Indian exporters far less respite.

While India’s exports to ASEAN doubled in the last 15 years, the trade deficit surged by $86 billion, driven by a threefold increase in imports. The growing gap has frustrated domestic manufacturers and MSMEs, who feel disadvantaged. Government sources said the Indian industry remains "deeply anguished" by the terms of the deal, which came into force in 2009.

India had entered into a review of the AITIGA in 2019 to expand the ambit of the deal.

Commerce Minister Piyush Goyal has previously criticised AITIGA, calling it poorly negotiated and suggesting that countries like Indonesia, Vietnam, and Malaysia function as “China’s B-Team”, allowing indirect entry of Chinese goods into India.

As part of its broader trade strategy, the government is now placing greater emphasis on sector-specific interests in FTAs. "None of our recent trade agreements have faced pushback from MSMEs, farmers, or domestic manufacturers," a source said, adding that future FTAs will continue to prioritise both offensive and defensive interests across sectors.

With the ASEAN review stuck, India’s focus has shifted to FTAs with complementary economies such as the UK, EU, and Gulf nations, where manufacturing is not competitive and a larger services export angle can be explored.