AIFTA

ASEAN-India Free Trade Area

India is one of the world’s largest and fastest‑growing major economies, with a large domestic market and strong potential for trade and investment. With a population exceeding 1.4 billion, India represents a major consumer and production base, making it a key economic partner for ASEAN.

ASEAN and India established full dialogue relations in 1995, and economic ties have expanded significantly over time. In 2024, two‑way trade between ASEAN and India reached US$106.83 billion, while FDI inflows from India amounted to US$3.5 billion, placing India among ASEAN’s important trading partners and investors.

The ASEAN–India Free Trade Area (AIFTA) was established under the Framework Agreement on Comprehensive Economic Cooperation signed in 2003, which laid the foundation for deeper economic integration between both sides.

Key Agreements under AIFTA

• ASEAN–India Trade in Goods Agreement (AITIGA) (signed in 2009, entered into force in 2010)
  Provides for progressive tariff reduction and elimination on a substantial portion of traded goods, facilitating greater market access between ASEAN and India.
• ASEAN–India Trade in Services Agreement (AITISA) (signed in 2014, entered into force in 2015)
  Promotes liberalisation of services sectors by reducing restrictions and improving market access for service providers in both regions.
• ASEAN–India Investment Agreement (AIIA) (signed in 2014, entered into force in 2015)
  Provides a transparent and predictable investment environment through:
  • fair and equitable treatment
  • protection against expropriation
  • provisions for compensation
  • guarantees on transfer of funds

Role in Regional Integration

The AIFTA has strengthened ASEAN–India economic relations by:

• enhancing trade liberalisation
• facilitating cross-border investment
• improving connectivity between South Asia and Southeast Asia
• supporting integration into regional value chains

Both sides are currently reviewing and upgrading the AITIGA to enhance its relevance, simplify procedures, and improve usability for businesses.

ASEAN–India cooperation is expected to deepen further, supported by:

• ongoing AIFTA upgrades
• participation in ASEAN-led mechanisms
• growing focus on digital economy, services, and supply chains

India’s expanding market, young population, and increasing economic integration position it as an important partner for ASEAN’s growth and diversification.