India-asean FTA review: Thailand flags rules of origin

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of women now believe they have equal workplace opportunities as men, indicating shifting dynamics towards workplace equality

AFTER PUSHING back against India’s food security programme at the recently concluded WTO meet, Thailand is learnt to have objected to customs regulations implemented in 2020 to verify rules of origin under free trade agreements (FTAS) for guarding against misuse of benefits, a government official said.

Thailand’s objection was flagged during the ongoing India-asean FTA review where India is trying to boost exports to Association of Southeast Asian Nations countries. The Indiaasean trade gap in FY23 surged to $43.57 billion in favour of Asean countries, growing sharply by over 40 per cent compared to $25.75 billion in FY22.

Trade experts said the Indiaaseantradegaphasbeenrisingas several multinational companies are increasing investments in Asean nations as part of their China-plus-onepolicy.moreover, production-linked incentive schemes have also increased demand for intermediate products sourced from Asean countries.

Thailand’s objection also comes in the backdrop of growing Chinese influence. Beijing became the largest source of FDI for Thailand during the last calendar year. Beijing and Bangkok have also expanded defence cooperation during the last decade.

“Our trade deficit has gone up with Asean countries. India had sought the review of the India-asean FTA and we are looking for better market access and they are also looking to fast track trade facilitation. Because of CAROTAR — Customs (Administration of Rules of Origin under Trade Agreements) Rules — their exports are affected. Thailand has especially objected during the review meeting,” said a government official, requesting anonymity.

“They are also looking to increase

coverage of tariff elimination. And we are also looking for liberal product-specific rules (PSRS) in electronics, chemicals and textiles. Besides, we are looking to streamline non-tariff barriers that have been a concern for our exporters,” the official said.

PSRS determine the circumstances in which goods imported from a member, that have components or inputs from a non-member, are still eligible for preferential tariff treatment. PSR rules are negotiated to simplify the use of FTA as India’s utilisation rate of the Asean FTA has remained weak over the years.

“The China-plus-one strategies being adopted by several MNCS in recent years, including by some Chinese firms which are also increasing their investments in Asean countries, are already seeing a rise in the manufacturing and export capacities in Asean,” said a report by V S Seshadri, former Indian Foreign Service officer and Joint Secretary for WTO matters in the Ministry of Commerce from 1999 to 2003.

The report for thinktank Delhi Policy Group said India’s high tariffs have resulted in greater advantage to Asean countries and wider trade deficit.