'Exports to Asean stagnate, while imports rise 33% post FTA'

India's exports to Association of Southeast Asian Nations (Asean) stagnated at USD 25 billion since start of the Free Trade Agreement with the 10-nation bloc in January, 2010, while imports rose more than 33 per cent to USD 40 billion during the period, says to a study.
The report compiled by Assocham observed that for the period between 2010-11 and 2015-16, the share of India's total exports to the South East Asian region also dropped to 9.6 per cent from 10.3 per cent when the FTA came into force.
The industry body said the study's findings raise "a big question mark" over the utility of the trade-opening pact with the common market of South East Asia.

"Though the global slowdown also seems to have played a role in no growth in exports to the Asean, the same did not hold good for imports from the bloc," Assocham said, adding the impact on increased imports may be even more pronounced on conclusion of the current financial year since tariff is to be eliminated on as many more items as 800 under 1,252 tariff lines.
Tariff would have already been eliminated on 3,200 products under the Normal Track 1, the paper highlighted.
The India-Asean overall FTA comprises two parts - goods and services. The agreement on goods was front-loaded, while services pact was back-loaded.

The industry body said the arrangement did not really help India.
Given that Indian tariff levels are generally higher than tariffs of Asean , India has relatively less to gain from this trade in goods agreement, Assocham President Sunil Kanoria said, pressing for effective access to market of services in Asean for India, an area of advantage to the country.
The Asean-India Investment and Services Agreement came into force on July 1, 2015. Though a preferential deal on services trade with the region should bring significant gains to India, the services sector is protected through strict domestic regulations and various restrictive requirements.