May 20, 2023
ASEAN-India Free Trade Agreement Tariff Schedule: An Overview
The ASEAN-India Free Trade Agreement (AIFTA) is a comprehensive agreement between the ten member states of the Association of Southeast Asian Nations (ASEAN) and India. The agreement aims to promote trade and investment between the two regions by eliminating tariffs and reducing non-tariff barriers.
The AIFTA was signed in 2009 and came into force on January 1, 2010. It covers trade in goods, services, and investments. Under the agreement, both ASEAN and India have committed to reducing or eliminating tariffs on a wide range of products over a period of time.
The AIFTA tariff schedule sets out the timeline and the specific tariff reductions for each product. The tariff reductions are staggered over several years, giving businesses time to adjust and adapt to the new rules.
Tariff reductions under the AIFTA are based on the principle of “Most Favored Nation” (MFN) treatment. This means that ASEAN and India will give each other the same treatment that they give to their most favored trading partners. This ensures that all trading partners are treated equally and fairly.
Under the AIFTA, ASEAN and India have agreed to reduce or eliminate tariffs on a wide range of products. These include agricultural products, industrial goods, and machinery. For some products, such as certain fruits and vegetables, the tariff reductions are immediate. For others, such as motor vehicles, the reductions are phased in over several years.
The tariff reductions under the AIFTA are expected to benefit businesses in both regions. By eliminating or reducing tariffs, businesses will be able to lower their costs and increase their competitiveness. This will help to boost trade and investment between ASEAN and India and create new opportunities for businesses in both regions.
In addition to tariff reductions, the AIFTA also includes provisions for non-tariff barriers, such as technical regulations, standards, and licensing requirements. These provisions aim to reduce the costs and complexities of doing business between ASEAN and India.
The AIFTA is an important agreement for businesses in ASEAN and India. It provides a framework for trade and investment between the two regions and eliminates tariffs and non-tariff barriers that can hinder business growth. As the tariff reductions under the AIFTA continue to be implemented, businesses in both regions can look forward to new opportunities for growth and expansion.