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        Is It Finally Time for India's Free Trade Agreements? The ASEAN “Present” and the RCEP “Future”
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Since the inception of the WTO in 1995, India enthusiastically explored export-promotion strategies through multilateral trade reforms. However, the country has moved towards the regional trade route since 2004, primarily owing to the slow progress of the Doha Round negotiations. As a result, the whole architecture of international trade law and governance is being redesigned in the Asia Pacific region. This paper focuses on the pivotal role played by India in this rebalancing. Given the stress on services exports and investment requirements, India focused on entering into comprehensive agreements encompassing merchandise and services trade as well as investment provisions. Presently, India is involved in the ongoing Regional Comprehensive Economic Partnership [RCEP] negotiations, where ASEAN remains at the core. The current analysis evaluates the Indo-ASEAN trade patterns and evolving dynamics over the last decade through select trade indices, and comments on the future of the RCEP.



Professor of International Economics, Indian Institute of Foreign Trade.


Professor of International Law, Faculty of Law, Chinese University of Hong Kong.


Faculty of Law, Chinese University of Hong Kong.

Given the slow progress of the World Trade Organization [WTO] Doha Round negotiations, the attractiveness of entering into Regional Trade Agreements [RTAs] has deepened during the last two decades.1 WTO members are permitted to enter into RTAs under specific conditions within three sets of rules, Article XXIV of the General Agreement on Tariffs and Trade [GATT],2 the Enabling Clause,3 and Article V of the General Agreement on Trade in Services [GATS].4 RTAs formulate rules aiming at trade liberalization, which cover the formation and operations of custom unions and free trade agreements [FTAs].5 One of the favourable impacts of RTAs on the WTO is the possibility of facilitating WTO negotiations, given that RTAs generally reach a higher level of tariff elimination.6 In addition, RTAs can also broaden its coverage in rule-making by accepting new members.7 In contrast, the proliferation of RTAs also generates integration concerns in the light of the fact that some RTAs are “light and superficial”.8

Several Asian countries, particularly in Southeast and East Asia, have aggressively entered into multiple trade blocs, namely the Association of Southeast Asian Nations [ASEAN] FTA (1992), the Sino-ASEAN FTA (2005), the South Korea-ASEAN FTA (2007), the Japan-ASEAN FTA (2008), the Australia-New Zealand-ASEAN FTA (2010), the ASEAN-India FTA (2010), and so on. The tariff and rules of origin [ROOs] reforms as well as the trade facilitation measures implemented through these preferential trade agreements have significantly contributed in deepening the global value chains [GVCs] and international production networks [IPNs] in the region.9 The recent initiative to enhance the trade relations of the region with North America has, however, been stalled after the pull-out of the US from the Trans-Pacific Partnership [TPP].10 It has been conjectured that the US pull-out from the TPP may accelerate the ongoing negotiations on another mega-regional bloc, namely he Regional Comprehensive Economic Partnership [RCEP] involving ASEAN and its six FTA partners.11 It is expected that the RCEP, a bloc connecting economies from a wider development spectrum and spread across a significant part of the continent, would be instrumental in augmenting cross-border trade and investment flows by addressing concerns about a “noodle bowl” of overlapping bilateral agreements.12 As the bloc by scope and coverage targets “WTO-consistent” provisions only, it scores over other similar mega-regional provisions (e.g. the TPP).13 However, the development divergence among the RCEP countries and ASEAN's existing FTAs with six partners is possibly posing a significant hurdle in further liberalizing trade.14 For instance, securing the “appropriate forms of flexibility including provision for special and differential treatment” poses a major challenge for the negotiation process.15 As a result, arriving at “common consensus” has been a problem, as the products under tariff elimination commitment in ASEAN's FTA partners are “only 73.3% on average”, compounding the process of negotiations.16

The RCEP was launched in November 2012 and the negotiations began in May 2013. The objective of launching the RCEP negotiations was “to achieve a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement among the ASEAN Member States and ASEAN's FTA Partners”, that would “cover trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement and other issues”.17

The first round of negotiations was held in May 2013, and by July 2018 twenty-two rounds as well as several RCEP Ministerial Meetings had taken place.18 The third RCEP Ministerial Meeting acknowledged the attempts by countries to progress with “offers and requests in goods to achieve the maximum ambition possible, while balancing sensitivities through suitable mechanisms like staging periods and line exceptions”.19 With a growing focus to conclude the final agreement, negotiations have become increasingly more complex, with around 700 officials gathering for negotiations in 2017, compared to sixty delegates at the meetings in 2013.20

The Joint Leaders’ Statement after the first RCEP Summit on 14 November 2017 reiterated the commitment of the bloc to facilitate trade liberalization through market access, rules, and co-operation. The gaining momentum in negotiations on eighteen core areas (Trade in Goods, ROOs, Trade in Services, Financial Services, Telecommunication Services, Remedies, Investment, Competition, Government Procurement, Intellectual Property, E-Commerce, Dispute Settlement, etc.) was noted and the group's objective to conclude negotiations at the earliest was underlined.21

Minute details of the negotiations remain largely confidential,22 although official reports provide updates on progress made—e.g. two chapters (on Small and Medium-sized Enterprises, and Economic and Technical Cooperation [ECOTECH]) had been concluded by the end of 2016.23 The recent status of RCEP negotiations can be assessed from the Joint Leaders’ Statement released after the second RCEP Summit on 14 November 2018. The RCEP Participating Countries [RPCs] noted the conclusion of negotiations on provisions for five key provisions, namely: Customs Procedures and Trade Facilitation [CPTF]; Government Procurement; Institutional Provisions; Sanitary and Phytosanitary [SPS] Measures; and Standards, Technical Regulations, and Conformity Assessment Procedures [STRACAP]. The statement expressed satisfaction over considerable progress in negotiations on goods and services market access and on investment reservation lists through a series of negotiations during 2018.24

It is clear from past trends that RCEP negotiations aim to minimize possible grievances among Member Countries once the trade reforms are initiated. For instance, the negotiations for the creation of cohesiveness among members, i.e. small enterprises, technical co-operation, trade facilitation, SPS measures, and conformity assessment procedures, have been concluded before finalizing the trade in goods provisions, given the dominance of small and medium-sized enterprises [SMEs] in constituent developing economies, which are characterized by diverging levels of internationalization.25

The RECP thus displays clear emphasis on economic co-operation to deal with the problems of the developing Member States and, once completed, it will offer a powerful boost to the rules-based global trading system.26 It encompasses the first ever agreements that cover China, India, Japan, and South Korea. As the most ambitious agreement ever negotiated by the developing countries, it changes the landscape and offers new evidence of Asian leadership in world trade.27 One of the crucial advantages of the proposed RCEP bloc is the existing bilateral agreements among partners, gradually deepening trade links, and the associated familiarity effects. Despite these drivers, the slow progress of RCEP negotiations,28 which includes an ambitious agenda29 covering trade in merchandise products, services, investment, and WTO-Plus areas like competition policy,30 can be partly explained by the delays in finalizing tariff preferences in currently non-existing arrangements in the mega-RTA. Pressure is mounting on countries like India, whose average tariff is higher than the corresponding figure for ASEAN.31 Also, the process of establishing the missing linkages in the trade agreement architecture has been slow. For instance, China and India are not linked through a preferential agreement at present, and arriving at a mutually beneficial tariff reform arrangement at the RCEP involving these two countries has so far proved to be difficult.32 This is despite the potential optimality of dealing with China through an RTA rather than a bilateral agreement.33 A practical challenge for the RCEP had been to streamline trade reforms among RCEP partners without a prior relationship, and rounds of negotiations have eased the concerns. It has now been agreed at the third RCEP Ministerial meeting on 24 August 2015 that “India would do a 42.5% threshold with China reciprocating with a 42.5% threshold, New Zealand doing a 62.5% threshold and Australia doing an 80% threshold over a 10 year period”.34

The RECP’s economic effects are expected to be substantial, although much depends on the template that emerges as only eighty percent of tariff lines are with long phase-out periods, while for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership [CPTPP], some countries may reduce one hundred percent.35 Further, the US-China trade war complicates RCEP negotiations. On the bright side, it may accelerate the process of completing the RCEP, especially with the US introducing a “poison pill” clause in the United States-Mexico-Canada Agreement [USMCA]. Under this clause, it effectively nullifies the ability of any three members to conclude a deal with a country that “at least one Party has determined to be a non-market economy for purposes of its trade remedy laws”, such as China.36 Some commentators also worried that the trade war will shift Chinese exports to their markets; in the meantime, India and Vietnam may enjoy greater access to the US market.37

The current analysis intends to look into the major trends involving India's trade pattern with ASEAN countries and other RCEP members, and to understand whether the performance of the country under the ASEAN-India FTA [AIFTA] in any way influences its participation in the RCEP negotiations. The paper is arranged along the following lines. First, the background of the AIFTA negotiations is briefly mentioned. The legal architecture of the AIFTA is analyzed next in the light of the other bilateral agreements of ASEAN. The modest outcome of the AIFTA so far is analyzed next with help of select trade indicators. Finally, based on the findings, the policy conclusions are drawn.


After the inception of the WTO in 1995, India initially focused on the multilateral route for export promotion. However, the euphoria over achievements at the Doha Ministerial (2001) of the WTO gradually subsided after the modest achievements from the Cancun Ministerial (2003) onwards. Since 2004, India increasingly started to explore the RTA route for export promotion.38

A. Genesis of the Indo-ASEAN FTA

Given the slow progress of negotiations on the South Asia Free Trade Area [SAFTA] and the development profile of ASEAN members, India subsequently entered into an Early Harvest Programme [EHP] under the Indo-Thai FTA (2004) and Indo-Singapore Comprehensive Economic Cooperation Agreement [CECA] (2005). These initiatives fitted in with the broad Indian policy frameworks, namely the “Look East Policy” (1991) and the “National Common Minimum Programme” (2004).39 To deepen India's trade with Southeast Asia further, the Framework Agreement of the AIFTA was signed in 2004. However, the conclusion of the FTA was delayed due to differences over several issues, covering the sequencing of tariff reforms, negative list and sensitive items (particularly in agriculture), determining ROOs, reducing the import duty on refined palm oil and other agricultural products, and so on.40 The agreement to liberalize trade in merchandise finally came into force in 2010. The primary motivation for India to embrace a trade relationship with ASEAN was a positive expectation towards a rise in bilateral trade volumes in the post-bloc period.41 The rise in merchandise trade was expected to follow from both tariff and non-tariff barrier [NTBs] reforms.42 Moreover, enhanced investment flows to an India rich in skilled labour from technologically advanced ASEAN members (e.g. Singapore, Thailand) and other regional partners, with the potential for technology transfer, were among the expected benefits.43

Apart from the potential rise in merchandise trade, a considerable increase in services exports from India was also predicted.44 It is observed that while several Southeast Asian countries are more competitive vis-à-vis India for merchandise products, in professional services categories the competitiveness pattern is reversed.45 In other words, Indian policy-makers became aware of the possibility that potential losses in the ASEAN market on the merchandise front might be compensated for by the gains in the service sectors. The negotiations to remove barriers to trade in services in Indo-ASEAN trade followed after inception of the FTA in merchandise products. However, the negotiation on revised offers and sectoral exceptions (i.e. market access and national treatment limitations) from ASEAN members proved to be a lengthy process.46 The delays to the conclusion of the negotiations for the Indo-ASEAN CECA therefore caused India to seek access to key ASEAN markets bilaterally through the Indo-Malaysia CECA (2011), and to initiate discussions for the Indo-Indonesia CECA in 2011.47 In 2014, an agreement on trade in services was reached, in which both sides decided to open up sectors such as “telecommunication and financial and insurance services, while regulating the movement of natural persons”.48

B. India's “Act East Policy”

India launched the “Act East Policy” in 2014, with an explicit focus on expanding economic co-operation with the Asia-Pacific.49 With the conclusion of the India-South Korea Comprehensive Economic Partnership Agreement [CEPA] and AIFTA in 2010, and the India-Japan CEPA in 2011, India's trade with both Southeast and East Asia started increasing.50 The linkage of the Indian manufacturing sector with firms located in these two subregions increased as a result of the tariff reforms.51 In this context, participation in the RCEP has been considered an ideal move to enhance India's trade with Asia-Pacific in general, and to deepen its integration in Asian IPNs and GVCs in particular.52 However, India's average trade deficit with ASEAN has worsened from US$0.85bn in 2001–05 to US$6.11bn in 2006–10, and further to US$9.63bn in 2011–16.53 Given the central role of ASEAN in the RCEP arrangement, the intensity of India's negotiations at the RCEP forum can be considered an indirect function of realized modest success of the AIFTA, driven further by apprehension on expected benefits.

A couple of factors significantly influenced the bilateral trade and investment flows between India and ASEAN. First, the Indo-ASEAN agreement became operational from 2010,54 considerably later than ASEAN's engagements with China (2005),55 South Korea (2007),56 and Japan (2008).57 With the consequent tariff reforms, these partners had a lead time over India to consolidate their positions in the ASEAN market. Moreover, the investment integration of ASEAN with Japan and South Korea flourished from the late 1970s following the “Flying Geese” model, which paved the way for technology transfer, the fragmentation of production blocs, and intense bilateral flows.58 The South Korea-ASEAN and Japan-ASEAN FTAs, through explicit trade facilitations provisions, significantly enhanced bilateral trade volumes, which often were intra-industry trade [IIT] in nature.59 On a similar note, China pushed for market economy status in ASEAN in the post-FTA period, which significantly improved its export penetration.60

On the other hand, India, a latecomer to the ASEAN market as an FTA partner, had to withstand intense competition from the existing partners and the associated tariff preferences.61 For instance, Vietnam imposed a duty of five percent and zero percent on the import of Linear Alkyl Benzene Sulphonic Acid from India and South Korea, respectively, and similar examples abound.62 Second, slow reforms of the NTBs in the ASEAN market, particularly the Sanitary and Phytosanitary Measures [SPS] and Technical Barriers to Trade [TBT] related ones, reduced opportunities for Indian exports.63 Even with the comprehensive partners, the lack of mutual recognition of standards is a major challenge for Indian exports.64 Conversely, ASEAN partners often raised voices against existing tariffs as well as the NTBs in the Indian market.65 Third, a wide range of trade-restrictive measures including NTBs still persist in the ASEAN market on service imports,66 much to the chagrin of India67. Fourth, despite launching the Indo-ASEAN CECA and the introduction of initiatives such as “Make-in-India” at home, the Foreign Direct Investment [FDI] policy reform in India was more influenced by the political economic undercurrents. For instance, a major set of FDI reforms was implemented by the ruling party after its defeat in a state election.68 Fifth, the modest performance of the country in terms of Ease of Doing Business (ranked 130th and 131st during 2017 and 2016, respectively)69 further contributed to lower FDI inflows. The country considerably improved its ranking to 100th position in the subsequent year, which is expected to increase FDI inflows.70 Finally, India has been ranked 44th in the Logistics Performance Index 2018, with only Singapore (ranked 7th) and Malaysia (ranked 41nd) among ASEAN members positioned above it.71 The cumulative effects of this mismatch in the level of trade facilitation, existing tariff barriers, and NTBs, and other concerns, could not enhance India's manufacturing sector competitiveness vis-à-vis ASEAN to the desired extent on the one hand and limited bilateral trade flows on the other. This observation underlines the need for further improvements in trade facilitation measures and the mutual recognition of product standards. In all, while the AIFTA formalized the trade relationship, unfinished reforms at both ends possibly undermined the realization of trade potentials.


The slow progress of the RCEP negotiations can further be explained through the possible divergences in the operational aspects, e.g. (1) the comprehensiveness of tariff elimination, (2) the differing rules of origin, and (3) differences in legal architecture among the ASEAN+5 (i.e. ASEAN plus five other jurisdictions, namely, Japan, China, South Korea, Hong Kong, and Taiwan) countries. First, through a stocktaking of the provisions in existing ASEAN trade agreements, Shujiro Urata noted that the actual trade liberalization rate (defined as the proportion of tariff lines subject to tariff elimination) under the AIFTA had remained at a moderate level vis-à-vis other agreements. For instance, the ASEAN-Australia/New Zealand FTA has the highest trade liberalization rate at 95.7 percent, with tariff elimination on almost all imports from ASEAN countries completed. While a similar level of trade liberalization is visible in ASEAN's FTAs with China (94.7 percent), Korea (94.5 percent), and Japan (92.8 percent), the corresponding figure for the AIFTA stand at the lowest level of 79.6 percent.72 In other words, the proportion of tariff lines under “negative list” and “safeguard list” is much wider in the AIFTA, with consequent trade repercussions.

The low trade liberalization rates in the AIFTA can be attributed to three factors. First, in many product segments sharp competition prevails between India and the ASEAN countries for capturing the global market, e.g. apparel products, iron and steel products, auto components, etc.73 On the other hand, Indian export patterns are not evolving in line with the import pattern of several ASEAN countries, as reflected in a moderate trade complementarity scenario.74 In other words, a trade friction as well as a trade focus mismatch are quite apparent. Second, because the level of trade liberalization is negotiated bilaterally in ASEAN + 1 FTAs, reciprocity is of crucial importance. India's level of trade liberalization is significantly lower than that of ASEAN's other FTA partners, and the ASEAN countries’ commitments tend to be lower in their agreements with India. For instance, the overall trade liberalization rate for Singapore stands at 100 percent for all five ASEAN + 1 FTAs, indicating complete tariff elimination. The corresponding figures for other ASEAN countries are: Brunei Darussalam (95.9 percent), the Philippines (93.1 percent), Thailand (92.6 percent), Malaysia (92.0 percent), Cambodia (90.0 percent), Viet Nam (89.5 percent), Lao PDR (89.3 percent), Myanmar (87.3 percent), and Indonesia (83.4 percent). Conversely, trade liberalization figures for Indonesia in the AIFTA register a rate of 48.7 percent.75 Hence, for arriving at an RCEP, the need for incremental reform under the AIFTA is far more complex as compared to the other five ASEAN + 1 FTAs.

Second, the FTAs might have various types of ROOs, namely: wholly obtained or produced in a country [WO], regional value content [RVC], change in tariff heading [CTH], and specific process rule [SPR]. If a country is wary of a surge in imports in the post-bloc period, they can opt for twin criteria, involving: (1) value addition and (2) substantial transformation. On the former, both sides may agree on a minimum value addition level (e.g. thirty, thirty-five, or forty percent) in the partner country, so that the export can be eligible for a preferential tariff at the point of import. RVC enables the exporting country to procure the necessary parts and components from partner countries within the bloc (e.g. for Thailand to import from another ASEAN member such as Singapore and then export to India after necessary value addition). If the value addition requirement under the RVC is lower (e.g. thirty percent), it implies that the partners are agreeing to allow the import of more raw materials (either more cost efficient or characterized by better quality) to enter from countries outside the bloc. On the latter front, if the countries agree to a change in chapter ([CC], i.e. at Harmonized System 2-digit level), it means that there has to be substantial transformation of the import from outside the bloc. For instance, under this provision India can import cotton products (say, HS 520100) from Mexico (a non-member country) and export garment products (HS 610910) to Thailand (an FTA partner). The substantial transformation requirement is quite stringent in this context. Conversely, for a change in tariff heading ([CTH], i.e. at Harmonized System 4-digit level) and a change in tariff sub-heading ([CTSH], i.e. at Harmonized System 6-digit level), the stringency gradually comes down.

The complexity of the ROOs in the five existing ASEAN + 1 FTAs can be compared in Table 1. First, it can be seen that, while there are no products with CC requirements in AIFTA, the application of twin criteria—an RVC of thirty-five percent (of the f.o.b. value) plus CTSH, is quite common for India. It can be noted that India follows the thirty-five percent RVC (of the f.o.b. value) and CTSH with South Korea and Japan, while forty percent RVC and CTSH is followed for Singapore and Thailand.76 Second, the application of a single ROO criterion has not been considered in the Indian context. Barring the other exception of the ASEAN-People's Republic of China [PRC] FTA, ASEAN follows a co-equal rule: a minimum of forty percent RVC or a CTH criterion. The co-equal rule is less restrictive than a single rule, because it gives traders a choice in the application of ROOs, and they can select the less restrictive rule as applied to their specific goods. For the ASEAN-PRC FTA, the general rule is that a forty percent RVC or product-specific ROOs are applied.77 Comparing the AIFTA with the other five ASEAN-centric FTAs, it can be noted that the RVC requirement at thirty-five percent for India is less restrictive when compared to the corresponding figure of forty percent in the other FTAs, but the CTSH requirement (i.e. at HS 6-digit level) might add to the operational complexity of the arrangement. Harmonization of the ROOs among the RCEP for RCEP partners would therefore be a complex process.

Table 1. Frequency by type of rules of origin used in ASEAN + 1 Free Trade Agreements.

Source: Urata (2013; see ftn 72), Table 6, based on research by E.M. Medalla

Notes: AANZFTA = ASEAN-Australia/New Zealand FTA; ACFTA = ASEAN-People's Republic of China FTA; AIFTA = ASEAN-India FTA; AJCEP = ASEAN-Japan Comprehensive Economic Partnership; AKFTA = ASEAN-Korea FTA. CC = product-specific rules about change of commodity classification. CTH = change in tariff heading at the HS 4-digit level. CTSH = change in tariff heading at the HS 6-digit level, making it less restrictive than CTH. * Exception varies, from sourcing of materials to process; ** e.g. CTH + RVC(40), CC + RVC(40), CC + Textile Rule; *** e.g. [RVC(40)+Textile Rule] or CC, RVC(>40), or CTH.

Last, the legal provisions under ASEAN's FTAs with China, India, Japan, and South Korea are compared with help of Table 2, by obtaining information from the ADB ARIC database.78 For market access of goods, special safeguard measures are regulated under Article 21 of the ASEAN-Japan FTA79 and Article 9 of the ASEAN-Korea FTA, respectively.80 In contrast, this type of provision is absent under the AIFTA and ASEAN-China FTA. Safeguard remedies are imposed based on the concept of fair-trade practice in the form of import restrictions. In general, safeguard measures aim at ensuring that a domestic economy “does not suffer serious harm from imports and trade concessions”. 81

Table 2. Comparing ASEAN's Free Trade Agreements by provisions.

Source: Compiled from ADB ARIC database (as of 29 September 2018),

Under the non-tariff measures, only the AIFTA provides exceptions under Artcile 12 and incorporates Article XX of the GATT,82 which normally serve as the rationale and justification for trade-restrictive policies, such as the protection of human, animal, or plant life.83 With regard to trade facilitation measures, customs procedure for the release of goods is regulated under Article 7 of the ASEAN-China FTA84 and Article 14 of the AIFTA,85 whereas it is absent from the ASEAN-Japan FTA and the ASEAN-Korea FTA. In respect of standards and conformance for the TBT,86 the ASEAN-China FTA, the ASEAN-Japan FTA, and the ASEAN-Korea FTA all provide such regulations under Article 7, Chapter 5,87 and Article 788 individually, other than the AIFTA. Apart from the ASEAN-China FTA and the AIFTA, SPS are regulated under Chapter 4 of the ASEAN-Japan FTA89 and Article 7 of the ASEAN-Korea FTA. TBT and SPS aim to ensure that the measures undertaken are not discriminatory and do not create unnecessary obstacles to trade. To elaborate, the national measures should not condemn for imposing discriminatory treatment or unjustifiable costs in order to favour domestic industry.90 At the same time, TBT and SPS recognize a state's right to implement measures by regulating goods. The measures can be implemented in ways that are different from market regulation in order to protect important values; however, such a distinction between protectionist measures and “justifiable regulatory autonomy” is difficult to make.91 Last, mutual recognition on product standards is only identified under Article 46 of the ASEAN-Japan FTA.92

For provisions regarding services, Article 4 of the ASEAN-China FTA93 recognizes cross-border trade under modes 1 and 2 exclusively, compared with mode 3 (commercial presence), defined under the investment sections of both the ASEAN-China FTA and the ASEAN-Japan FTA. Article 7.2 of the ASEAN-China FTA94 and Article 7 of the ASEAN-Korea FTA95 stipulate the protection of intellectual property. In the longer term, it is expected that “the effective utilization and exploitation of intellectual property” between ASEAN and its external trade partners will contribute “higher exports and greater in-flows of investment”.96 The ASEAN-China FTA engages matters in relation to E-commerce and environmental policy under Articles 7.197 and 7.2, in contrast to the other three ASEAN FTAs which lack such provisions, although differences over intellectual property and e-commerce remain two main hurdles to cross during the RCEP negotiations.98

Two major observations emerge from the analysis. First, trade facilitation provisions under the AIFTA are narrower in scope as compared to the ASEAN-Japan FTA, as mutual recognition of SPS or product standards are not explicitly included therein. The observation partly explains the relatively modest trade performance of the AIFTA observed so far. Second, service-related provisions do not form a major component of the ASEAN-centric FTAs. However, for India, facilitating service exports through the RCEP market is of crucial importance. India's cautious approach during the RCEP negotiations needs to be viewed in this light. Finally, the SPS standards, NTBs, and intellectual property rights related provisions are not evenly covered under the ASEAN-centric FTAs, and India needs to include these provisions in the RCEP for securing export success.


In order to evaluate whether the initial expectations from the Indo-ASEAN FTA have been fulfilled so far, a data analysis has been conducted in the following. Table 3 shows India's merchandise trade with ASEAN partners during 2001–16. The analysis has been conducted with Trade Map data.99 The study period has been divided in two sub-periods, namely, 2001–09 and 2010–16. While the former period depicts the limited trade integration (barring the Indo-Singapore CECA) of India with ASEAN, the latter provides insights on the post-bloc dynamics. The observations are noted in the following.

Table 3. India's export and import scenario with ASEAN countries (2001–16).

Source: Computed by authors from ITC (undated).

First and foremost, there has been a sharp rise in India's bilateral trade flows with all ASEAN partners, indicating growing convergence. The rise in the absolute value of Indian exports has been sharper with the relatively bigger economies, namely Indonesia, Malaysia, Singapore, and Thailand. Interestingly, with all these economies, India either has a bilateral comprehensive arrangement or is in the process of negotiating the same.100 Exports to Vietnam have also witnessed a sharp rise. A similar change in imports has been noted as well. Second, the rise in import value has been sharper, thereby widening India's trade deficits with ASEAN. In the post-bloc period, India's average trade balance witnessed a surplus with only four ASEAN members—Cambodia, the Philippines, Singapore, and Vietnam. Interestingly, the trade deficit has increased in the post-2010 period, indicating that the Indo-ASEAN FTA has significantly increased imports from partners. Also, India has a negative trade balance with Malaysia and Indonesia, the former already a “comprehensive” trade partner and the latter expected to be so shortly. The observation indicates that India's market penetration in ASEAN remains modest so far. Third, the importance of the ASEAN partners in India's trade basket has increased, but not in a very significant manner. Interestingly, the share of the Philippines and Singapore, with whom India enjoys a trade surplus, is declining in India's export basket. Only Vietnam stands out in the list. Finally, the compound annual growth rate [CAGR] figures reveal that India's export growth has generally declined for its ASEAN partners (barring the exception of Myanmar) in the post-2010 period, i.e. after the formation of the AIFTA. While the result can be in part explained by the lower trade base during 2001, the competition faced by India in the ASEAN market from other preferential trade partners in the bloc is also underlined.

To gain a wider perspective, India's trade performance with ASEAN compared with the other five FTA partners of the bloc is presented in Table 4. The study period has been divided in three sub-periods, namely 2001–05, 2006–09, and 2010–16. The first two periods indicate the modest trade link of the partners with ASEAN. The last period, however, indicates a time when all the FTAs had been signed, i.e. a period of deeper integration. Several interesting insights emerge from the table. First, only India and New Zealand have witnessed a decline in their trade balance with ASEAN over the period. However, the extent of the trade deficit decline has been sharper for India. Second, Australia and Japan also experienced a trade deficit with ASEAN, but the extent is narrowing. South Korea, on the other hand, witnessed a growing trade surplus with ASEAN over the period. However, China registers a massive turnaround as its trade deficit with ASEAN during 2001–05 narrowed during 2006–09 and finally turned into a surplus during 2010–16. Second, the importance of ASEAN in the export basket increased for all the partners, with the exception of Australia and New Zealand. However, the increase during 2010–16 has been quite sharp for China, Japan, and South Korea. Finally, ASEAN's share declined in the import basket only for Australia. In particular, ASEAN's penetration in Chinese and Indian imports is relatively modest vis-à-vis their performance in Japan and South Korea. The results further indicate that, among all the RCEP partners, India's trade performance vis-à-vis ASEAN has been quite humble.

Table 4. Comparison of trade balance scenario of RCEP members with ASEAN.

Source: Computed by authors from ITC (undated).

The extent of trade integration between India and its ASEAN partners can be further understood by analyzing the bilateral Trade Intensity Index [TII], which shows whether two countries are engaged through trade more intensely vis-à-vis their global trade flows. The TII is calculated by the following formulation:

$$TII = \; \displaystyle{{\mathop \sum \nolimits_{sd} Xsd_{}/\mathop \sum \nolimits_{sw} X_{sw}} \over {\mathop \sum \nolimits_{wd} X_{wd}/\mathop \sum \nolimits_{wy} X_{wy}}}$$

In the numerator, Xsd refers to the bilateral exports of a given country pair (say, India and Thailand), while Xsw indicates their global exports. In the denominator, Xwd and Xwy represent world exports to a country pair (e.g. India and Thailand) and to the world, respectively. The value of the TII above 1 for any given country pair (say, India and Vietnam) indicates that the trade relation is “intense”, while a value less than 1 indicates otherwise. It is expected that, as a result of the formation of a trade agreement, the index would increase and eventually cross 1. The TII indices have been obtained from the ADB ARIC database.101

The average TII results for total trade flows are summarized in Table 5. The study period has been divided in three sub-periods, namely, 1990–99, 2000–09, and 2010–15. The last period is known for the deeper trade integration of ASEAN with its FTA trade partners. To compare India's performance in the light of other RCEP partners, the corresponding results for China, Japan, and South Korea are also reported. The results indicate that, at the aggregate level, India is not having an intense trade relationship with four ASEAN countries during 2010–15, namely Cambodia, Lao PDR, the Philippines, and Thailand. The corresponding numbers for China, Japan, and South Korea are one (Brunei), two (Cambodia, Lao PDR), and two (Brunei, Myanmar), respectively. While India's non-intense trade relations, even after the formation of the FTA, with almost fifty percent of ASEAN members is a matter of concern; the development profile of these countries is also telling. For instance, the presence of only the Philippines and Thailand, two developing countries in the list, underlines India's limited market penetration vis-à-vis other RCEP partners.

Table 5. India's Overall Trade Intensity Index with ASEAN in comparison with select RCEP members.

Source: Constructed by authors from ADB (undated).

The intensity of a country to reach the partner markets as compared to rest of the world, particularly for key economic sectors, can be understood through the Export Intensity Index [EII]. The EII can be calculated by the following formulation:

$$EII = \displaystyle{{x_{ij}/X_{iw}} \over {x_{wj}/X_{ww}}}$$

In the numerator, Xij refers to the bilateral export of a given country pair (say, India's exports to South Korea), while Xiw indicates India's global exports (either in total trade or in a particular sector, say, pharmaceuticals). In the denominator, Xwj and Xww represents world exports to the importing country (i.e. South Korea in this case) and to the rest of the world, respectively. A value of the EII above 1 for any given country pair (say, India and South Korea) indicates that export penetration from India is “intense”, while a value of less than 1 indicates otherwise. As with the TII, it is expected that trade integration would result in a rise in the index, which eventually may pass 1.

The EII indices have been computed from the Trade Map data. EII data for six key sectors, namely Inorganic Chemicals (HS 28), Organic Chemicals (HS 29), Garments, Knitted or Crocheted (HS 61), Machinery and Equipment (HS 84), Electrical Products (HS 85), and Automobile Products and Components (HS 87) have been computed for India, China, Japan, and South Korea, involving their trade with key ASEAN countries. Also, for additional insight, the EIIs for ASEAN's four FTA partners in their bilateral trade with the bloc have been reported.

The sectoral EII results summarized in Table 6 indicate how the effects of regional integration on merchandise trade influence the current RCEP negotiations. First, India's EII is generally above unity with ASEAN countries for several sectors, underlining its deeper penetration in respective markets vis-à-vis the rest of the world. However, for electrical products and garments, its penetration to most of the ASEAN economies has not deepened even in the post-bloc period. Second, India's EII is generally less than unity in all six sectors with China, Japan, and South Korea. This prevails despite the tariff preferences implemented under the Indo-Japan and India-Korea CEPAs. Third, China enjoys an intense export relationship with most of the ASEAN economies and its three FTA partners, indicating its growing competitiveness and urge to push for the RCEP. Finally, Japan and South Korea enjoy a favourable EII in most of the ASEAN markets and China. However, in the Indian market for garments sector the EII is less than unity for both countries. In addition, Japan also witnessed a non-intense export relation with India in the chemical sectors.

Table 6. India's sectoral Export Intensity Index with key ASEAN players in comparison with select RCEP members.

Source: Computed by authors from ITC (undated).

The EII observations underline India's negotiating perspective in the RCEP, considering its practical gains in the Indo-ASEAN FTA, and the Indo-Japan and India-Korea CEPA. The non-intense relation in several sectors with the FTA partners is reflected in India's rising trade deficits. Similarly, the sectoral non-intense relations with the three RCEP partners, despite the tariff preferences on its exports, may prompt India to adopt a cautious approach during RCEP negotiations. On the other hand, China enjoys an intense export relation with India, which it would like to formalize through further tariff reforms in India under the RCEP. India, however, would be cautious against possible Chinese dumping in the post-bloc period, an issue which is already a major area of concern.102 Japan and South Korea, on the other hand, look forward to further trade reforms and economies of scale for investment projects through the RCEP in a wider geographical region.


Deepening participation in IPNs has been another major motive for India to join the Southeast and East Asian FTAs. When a country is exporting a product (e.g. garments), it can either rely on domestic players to produce the entire value chain (i.e. produce cotton, fibre, fabric, and finally garments within the country) or depend on foreign suppliers for certain stages of production (e.g. produce and export cotton, and import fabric for garment production). It may also import quality services (e.g. banking, IT, consultancy, logistics) from abroad to enhance export competitiveness and potential.

If a country liberalizes import policy (either unilaterally or through an RTA), it is expected that, during the initial stage, the percentage contribution of domestic players in the exported product would decline, as exporters would source quality raw materials, intermediate products, and parts and components from abroad at a cheaper rate. This gives rise to the “Smile Curve” phenomenon,103 which may occur either due to the exit of domestic players caused by foreign competition or because of greater integration with regional IPNs. The former would lead to readjustments in the domestic sector, creating short-run resistances against liberalization. For a country like India, where participation by global multinational corporations [MNCs] remained nominal104 even two decades after liberalization, the foreign value content in exports may increase through the working of both forces. In the long run, as the domestic industry consolidates and matures by gaining competitiveness, their contribution in exports is likely to increase.

In the current context, the data on origin of value added in the exports of six sectors is drawn from the Organisation for Economic Co-operation and Development [OECD] Trade in Value-Added [TIVA] database.105 The six manufacturing sectors considered for analysis, namely textile and leather, chemical, base metals, computer and electronics, electricals, and transport equipment, are characterized by the presence of deepened IPNs. Table 7 summarizes the origin of the value added scenario for these sectors during 2000 and 2011 for Indian exports from RCEP partners. In other words, the table shows, for every US$100 worth of Indian exports in each sector, the value contribution from individual ASEAN and RCEP partners. The year 2000 represents the period before the formation of the major Asian FTAs, while the integration effects started materializing in 2011.

Table 7. Origin of value added in gross exports from India in select sectors (percentages).

Source: Constructed by authors from the OECD (undated).

The summarized results have the following interpretation. The figures presented in the row for India for a sector (e.g. transport equipment) indicate the percentage share of domestic value addition, while the other country rows represent the contribution of foreign value addition from that country. For instance, the last two columns reveal that, while in 2000 domestic value addition in the transport equipment sector in India (e.g. local parts and components, labour values embodied in output) contributed 80.809 percent of value addition to the country's total export of transport equipment, the corresponding figure in 2011 declined to 68.001 percent. On the other hand, the contribution of Chinese players in Indian exports of this category has increased significantly from 0.401 percent to 3.667 percent over this period. This implies greater participation by foreign players in the upstream activities of Indian exporting firms. While on the one hand this signifies a deepening of India's IPN integration with the world in the transport equipment sector, threats to domestic parts and components manufacturers from import penetration may not be ruled out.

The following observations emerge from Table 7. First, for exports of all six product categories, the percentage share of domestic value addition is declining for India, signifying increased sourcing from ASEAN and RCEP members and from other parts of the world. This might result from both the rise in imports of intermediate products in India given the tariff preferences, and the possible lack of competitiveness in semi-processed and intermediate product categories. Also, the rise in value addition in exports from Singapore (CECA in 2005) and Malaysia (CEPA in 2011) signifies that ASEAN suppliers are becoming integrated into Indian IPNs, with the aid of tariff preferences. However, participation by Indian players in upstream activities for ASEAN's exports still remains modest.106

Second, the rise in participation from ASEAN in India's production pattern remains much weaker as compared to China, which is an indicator of the dragon's growing competitiveness in the manufacturing sector, particularly in parts and components and intermediate products. The growing trade deficit of India with respect to China, resulting from both possible imports of intermediate products and service link costs, needs to be viewed in this light. This is in line with China's export pattern to other RCEP countries, where the country is expanding its share in the partner's export value content for several manufacturing categories.107

Third, the contribution from the CEPA partners South Korea and Japan has also increased in India's exports, given the tariff and trade facilitation reforms implemented through the RTA. However, their contribution looks quite modest in comparison with China. The phenomenon can be explained by two factors. One, because of geographical proximity and associated lower transportation costs Chinese products can enter the Indian market with relative ease vis-à-vis the Japanese and Korean players, and can participate more deeply in the value chains. Two, it is often observed that Indian traders are using the MFN route for trading with another FTA partner rather than following the preferential route, to avoid the associated compliance-related complexities.108 Finally, despite freeing FDI restrictions in India across sectors, the ease of doing business and other factors are still not favourable. The degree of FDI reform has also slowed down,109 perhaps thereby limiting the participation of Japanese and Korean players. This calls for initiating the necessary procedural reforms in existing FTAs on one hand and suitably amending the FDI policy framework on the other.

In recent global value and supply chains, particularly in process industries and logistics operations, increasing recourse to digital and artificial intelligence [AI] related technologies is being observed.110 Taking note of the emerging global trend, the Digital India initiative launched by the government of India in 2015 is already focusing on this aspect.111 The increasing use of AI-IT applications and robotics currently find applications in both the private and government sectors. It has been observed that “[c]ommercial applications of AI are huge and Indian start-ups are beginning to identify them and tap into the market, which is still nascent”.112

Table 8 summarizes the intra-RCEP trade pattern from an Indian perspective, by focusing on the stage of processing, for 2009 and 2017, respectively. By United Nations Conference on Trade and Development [UNCTAD] classifications, trade flows can be divided into four broad categories, namely raw materials (e.g. cotton yarn), intermediate goods (e.g. fibre and fabrics), consumer goods (e.g. 100 percent cotton garments), and capital goods (e.g. textile machines). In addition to trade patterns, the Intellectual Property Rights [IPR] Index rank of countries in 2018 is also noted. Several observations emerge from the table. First, it is observed that India's export basket to the advanced economies, i.e. Australia, Japan, New Zealand, and South Korea, primarily consists of intermediate products and consumer products. Second, for countries such as Australia and Singapore, the proportional share of capital goods has come down over the period. Third, India's import basket is predominantly tilted in favour of raw materials (coal and petroleum products) from Australia, Brunei, Indonesia, and New Zealand. Fourth, import of intermediate goods has increased from advanced countries like Japan, Malaysia, Singapore, South Korea, and Thailand, on the one hand, and emerging countries like Lao PDR and Myanmar, on the other. Finally, the relative import of capital goods is high from both advanced countries such as China, Japan, Singapore, South Korea, and Thailand, and emerging economies such as Vietnam.

Table 8. Comparing the composition of India's trade with RCEP Partners (in percentages) and intellectual rights protection.

Source: Computed from the WITS (World Bank, undated) data and Property Rights Alliance (2018); Notes: RM – raw materials; IG – intermediate goods; CG – consumer goods; KG – capital goods.

It can be observed from Table 8 that India is emerging primarily as an exporter of components and consumer goods to the RCEP region, barring the exception of Lao PDR. Though trade in technology products (distributed in consumer and capital goods) is very much observed, exports from India to the RCEP on that front have not yet intensified. One underlying reason behind this fact is that, through FDI from Japan, South Korea, and other sources over the last two decades, the ASEAN countries have reached a higher technology plane vis-à-vis India.113 This is reflected in both higher R&D expenses114 and better IPR rankings for the ASEAN countries when compared to India. In addition, AI is at a nascent stage in India now and the focus is concentrated on basic activities like healthcare, education, infrastructure, etc.115 Therefore, in the short run, the India-RCEP technology trade may intensify on the import front, and only after innovation becomes deeply rooted in the country through the “Make-in-India” initiative may exports pick up.


The analysis so far indicates that India's achievements under the Indo-ASEAN FTA have indeed been modest, with only partial fulfilment of initial expectations. The outcome can be explained in the following manner. Since the late 1990s, India has emerged as a service exporter, while the manufacturing sector has been steadily losing competitiveness. This poor performance has been explained by a lack of labour reforms, an absence of economies of scale, low firm turnover, imperfect market integration, high concentration, prevalence of obsolete technology, etc.116 While the manufacturing sectors in ASEAN members and China have benefitted greatly through technology transfer from Korean and Japanese investments, a similar effect on the Indian context is still missing despite the inception of the CEPAs. This cautious approach by foreign investors can be explained by several factors, e.g. the modest ease of doing business scenario prevailing in India, infrastructural bottlenecks, poor skill levels, and so on. In addition, several Indian Special Economic Zones [SEZs] have been set up with ease of land acquisition in mind, rather than proximity to a port and ease of exporting considerations. As a result, actual exports even from these regions remain far below potential.117 In the absence of these stage two reforms, tariff reforms under the FTA have merely increased imports, as reflected in the rising trade deficit and growing foreign value content in Indian exports.

Only in the recent period is India trying to make a concerted echo effect to revive the manufacturing sector. For instance, the recent “Make-in-India” campaign to facilitate FDI inflow and technology transfer has started to show positive results.118 The “Skill India” initiative is similarly expected to create a pool of highly skilled workers and thereby address the concerns of potential investors. The creation of crucial industrial corridors, linking the major economic and manufacturing centres, is another initiative to secure a reduction in the cost of domestic production on the one hand and facilitating foreign investment on the other.119 Finally the introduction of a Goods and Services Tax [GST] in India since 1 July 2017 is expected to simplify the tax regime in the country, helping both the domestic and foreign players established in the country. However, only in the long run will these measures strengthen Indian manufacturing sector competitiveness. Hence, in the recent period, the domestic sector has repeatedly approached the government for respite against cheaper imports from ASEAN, often through contingency measures.120 Similar protection against imports from China has also been sought and granted at times.121

India hoped to compensate for the limited gains under the Indo-ASEAN FTA in merchandise trade through increased export opportunities under trade in services. It agreed to participate in services sector negotiations after completion of the merchandise sector agreement, hoping that ASEAN would reciprocate. However, the lengthy negotiations on a services agreement with ten ASEAN countries after the entry of the FTA in goods resulted in less than expected benefits. Though India and ASEAN entered into the trade agreement on services and investment in September 2014, Indonesia and Cambodia are yet to ratify the provisions, primarily fearing entry of Indian professionals into their service markets.122 India is presently looking for further service sector reforms in other ASEAN markets as well. The country's recent interest in a Trade Facilitation in Services [TFS] agreement needs to be viewed in this light.123 The increasing stringency in the US services market would also force India to negotiate harder in the RCEP.124

The cautious approach adopted by India during the RCEP negotiations so far can therefore be explained by the growing trade deficit with the “East” economies on the one hand and the apprehensions about the exposure of domestic players to the duty-free entry of Chinese imports on the other. The growing merchandise trade deficit is already a matter of concern in India, with associated political repercussions.125 The partial realization of the potential benefits of service sector exports in the ASEAN market pose another challenge for India. The past experience with ASEAN and the prevailing trade scenario rationalize India's inclinations to conduct the RCEP merchandise and services agreement negotiations simultaneously rather than sequentially. The divergence in sectoral interests, e.g. China's ambitious agenda on trade in goods and defensive interests in services,126 is contrary to India's expectations from the bloc. Second, several tariff and non-tariff barriers on Indian products in the Chinese market have been noted in the literature, e.g. marine, chemicals, pharma, textiles and apparel, rubber, iron and steel, non-ferrous metals, plastics, and machinery sectors, among others.127 However, given the fact that ASEAN and China may press for deeper reform in India's merchandise imports, the slow progress of the negotiations is unlikely to change. Therefore, unless India receives a matching deal in the sphere of services, speedy agreement on the RCEP would remain elusive.

It deserves mention that the absence of wider stakeholder consultations and access to negotiating documents have often been criticized,128 which fuel a negative sentiment against the possible ill-effects of the bloc. The negotiators therefore prefer to adopt a cautious approach at RCEP forums, and the associated delays, if interpreted as negotiating victories, might provide political mileage at home.129

1 URATA, Shujiro, “Mega-FTAs and the WTO: Competing or Complementary” (2016) 30 International Economic Journal 231.

2 Art. XXIV of the General Agreement on Trade in Goods, online: WTO <>; art. XXIV: 4 sets out the general principle that underlies the formulation of RTAs to facilitate trade progress between the Contracting Parties on the one side, and to avoid creating barriers within such territories.

3 Enabling Clause Regulating the Regional or Global Arrangements for Trade in Goods Between Developing Country Members, online: WTO <>.

4 Art. V of the General Agreement on Trade in Service, online: WTO <>. See CHAISSE, Julien and MATSUSHITA, Mitsuo, “Maintaining the WTO's Supremacy in the International Trade Order: A Proposal to Refine and Revise the Role of the Trade Policy Review Mechanism” (2013) 16 Journal of International Economic Law 9.

5 Regional Trade Agreements and the WTO, online: WTO <>.

6 Urata, supra note 1 at 239.

7 I bid.; In recent years, there has been a strong preference for bilateral agreements with significant geographical overlap; see generally FIORENTINO, Roberto V., CRAWFORD, Jo-Ann, and TOQUEBOEUF, Christelle, “The Landscape of Regional Trade Agreements and WTO Surveillance” in BALDWIN, Richard and LOW, Patrick, eds., Multilateralizing Regionalism: Challenges for the Global Trading System (Cambridge: Cambridge University Press, 2009), 28.

8 BALDWIN, Richard and LOW, Patrick, “Introduction” in BALDWIN, Richard and LOW, Patrick, eds., Multilateralizing Regionalism: Challenges for the Global Trading System (Cambridge: Cambridge University Press 2009), 1.

9 LOPEZ-GONZALEZ, Javier and KOWALSKI, Przemyslaw, “Global Value Chain Participation in Southeast Asia: Trade and Related Policy Implications” in ING, Lili Yan and KIMURA, Fukunari, eds., Production Networks in Southeast Asia (Abingdon: Routledge, 2017), 13.

10 Pasha L. HSIEH, “Trade Strategies of the TPP-11 Countries: Asian Regionalism in Turbulent Times”, Research Collection SMU School of Law, Working Paper, 8 November 2017.

11 The remaining 11 TPP Members renamed the TPP the Comprehensive Progressive Trans-Pacific Partnership [CPTPP], kept its contents largely intact, and signed it in March 2018. The CPTPP took effect on 30 December 2018, online: <>; Hiro LEE and Ken ITAKURA, “U.S. Withdrawal from the Trans-Pacific Partnership and the Effects of Alternative Trade Integration Scenarios in the Asia-Pacific” University of Washington (March 2017), online: University of Washington <>.

12 Sanchita Basu DAS and Reema B. JAGTIANI, “The Regional Comprehensive Economic Partnership: New Paradigm or Old Wine in a New Bottle?”, ISEAS Economics Working Paper No. 2014-3, Singapore: Institute of Southeast Asian Studies, 2014.

13 WILSON, Jeffrey D., “Mega-regional Trade Deals in the Asia-Pacific: Choosing Between the TPP and RCEP?” (2015) 45 Journal of Contemporary Asia 345. See also CHAISSE, Julien, “Deconstructing the WTO Conformity Obligation: A Theory of Compliance as a Process” (2015) 38 Fordham Journal of International Law 57.

14 KIM, Young-Chan, “RCEP vs. TPP: The Pursuit of Eastern Dominance” in KIM, Young-Chan, ed., Chinese Global Production Networks in ASEAN: Understanding China (Cham: Springer International Publishing, 2016), 19.

15 Association of Southeast Asian Nations, “Guiding Principles and Objectives for Negotiating the Regional Comprehensive Economic Partnership”, online: ASEAN <>.

16 Meeryung, LA, “Regional Comprehensive Economic Partnership (RCEP): Progress and Challenges” (2017) 7 World Economy Brief 1.

17 The founding documents, approved 20 November 2012, are the “Joint Declaration by Leaders on the Launch of the Regional Comprehensive Economic Partnership” and the “Guiding Principles and Objectives for Negotiating the Regional Comprehensive Economic Partnership”. Quotations are from the preamble to the Department of Foreign Affairs and Trade, “Guiding Principles and Objectives for Negotiating the Regional Comprehensive Economic Partnership”, online: DFAT <>.

18 Association of Southeast Asian Nations, “Joint Media Statement-The Fifth Regional Comprehensive Economic Partnership (RCEP) Intersessional Ministerial Meeting”, Tokyo, 2018, online: ASEAN <>.

19 Government of India, Press Information Bureau, “3rd RCEP Inter-sessional Ministerial Meeting” (23 May 2017).

20 “RCEP Pact: 700 Officials from 16 Nations to Meet in Hyderabad” The Economic Times (28 June 2017).

21 Association of Southeast Asian Nations, “Joint Leaders’ Statement on the Negotiations for the Regional Comprehensive Economic Partnership (RCEP)”, online: ASEAN <>.

22 “RCEP Negotiations Conclude on a Secret Note” The New Indian Express (29 July 2017).

23 Association of Southeast Asian Nations, “Joint Leaders’ Statement on the Negotiations for the Regional Comprehensive Economic Partnership (RCEP)” (2017), online: ASEAN <>.

24 Ministry of Economy, Trade, and Industry, “Joint Leaders’ Statement on the Regional Comprehensive Economic Partnership (RCEP) Negotiations”, online: METI <>.

25 Naoyuki YOSHINO and Ganeshan WIGNARAJA, “SMEs Internationalization and Finance in Asia”, presented at “Frontier and Developing Asia: Supporting Rapid and Inclusive Growth”, IMF-JICA Conference, Tokyo, 18 February 2015.

26 Peter PETRI and Michael PLUMMER, “The Case for RCEP as Asia's Next Trade Agreement”, East Asia Forum (6 November 2018), online: East Asia Forum <>.

27 See generally CHAISSE, Julien and POMFRET, Richard, “The RCEP and the Changing Landscape of World Trade” (2018) 12 Law and Development Review 159.

28 Dezan SHIRA and Associates, “RCEP Negotiations Reach Critical Stage-Likely to be Inked by Year-End”, ASEAN Briefing (2018), online: ASEAN Briefing <>.

29 Sanchita Basu DAS, “Challenges in Negotiating the Regional Comprehensive Economic Partnership Agreement” ISEAS Perspective (2013), online: ISEAS Perspective <>.

30 Dato’ Dr Mahani Zainal ABIDIN, “RCEP: Can It Create the World's Largest FTA?” The Edge Malaysia (11 March 2013).

31 “Trade Calculations: India Offers to Parley on RCEP Tariff Terms” The Economic Times (24 May 2017).

32 Smitha FRANCIS, “RCEP: Is It in India's Interests?” Business Today (1 August 2017).

33 PURI, Hardeep Singh, India's Trade Policy Dilemma and the Role of Domestic Reform (Washington, DC: Carnegie Endowment for International Peace, 2017).

34 Ministry of Commerce and Industry, “Inputs on Initial Offer of Goods under Regional Comprehensive Economic Partnership (RCEP)”, online: MCI <>.

35 Sean HIGGINS, “US-Mexico-Canada Deal Targets China with ‘Poison Pill’ Provision” Washington Examiner (7 October 2018), online: Washington Examiner <>.

36 Ibid. See also CHAISSE, Julien and MATSUSHITA, Mitsuo, “China's ‘Belt and Road’ Initiative: Mapping the World Trade Normative and Strategic Implications” (2018) 52 Journal of World Trade 163.

37 Higgins, supra note 35.

38 CHAKRABORTY, Debashis and SENGUPTA, Dipankar, “Learning Through Trading? India's Decade Long Experience at WTO” (2005) 12 South Asian Survey 223.

39 CHAKRABORTY, Debashis, “The Economic Aspects of India's Foreign Policy” in MATTOO, Amitabh and JACOB, Happymon, eds., India and the Contemporary International System: Theory, Policy and Structure, Australia India Institute Foreign Policy Series III (New Delhi: Australia India Institute, Regional Centre for Strategic Studies and Manohar Publishers, 2014), 157.

40 CHAKRABORTY, Debashis and SENGUPTA, Dipankar, “Integration Experience and Trade Performance of the Indo-ASEAN FTA: A Review of Issues” in GUGLER, Philippe and CHAISSE, Julien, eds., Competitiveness of the ASEAN Countries: Corporate and Regulatory Drivers (Cheltenham: Edward Elgar 2010), 207.

41 Rahul SEN, Mukul G. ASHER, and Ramkishen S. RAJAN, “ASEAN-India Economic Relations: Current Status and Future Prospects” 39 Economic and Political Weekly 3297.

42 Mohammed SAQIB and Nisha TANEJA, “Non-tariff Barriers and India's Exports: The Case of ASEAN and Sri Lanka”, Indian Council for Research on International Economic Relations, Working Paper No. 165, July 2005.

43 Nagesh KUMAR, “Towards a Broader Asian Community: Agenda for the East Asia Summit”, Research and Information Systems for the Non-Aligned and Developing Countries, Discussion Paper No. 100, 2005.

44 Suparna KARMAKAR, “India-ASEAN Cooperation in Services-An Overview”, Indian Council for Research on International Economic Relations, Working Paper No. 176, November 2005.

45 CHAKRABORTY, Debashis and KEDIA, Mansi, “An Analysis of India's Recent Engagements in Comprehensive and other Trade Agreements in East and Southeast Asia” (2014) 25 Taiwanese Journal of WTO Studies 24. .

46 “Slow Progress in ASEAN Talks on Services, Investments” The Hindu (11 July 2010).

47 CHAKRABORTY, Debashis, “The Upcoming Indo-ASEAN CECA: Of Great Expectations and Areas of Concern” (2014) 50 China Report 259.

48 Preety BHOGAL, “India-ASEAN Economic Relations: Examining Future Possibilities”, Observer Research Foundation, Issue Brief No. 221, New Delhi, 2018.

49 Prashanth PARAMESWARAN, “Modi Unveils India's ‘Act East Policy’ to ASEAN in Myanmar” The Diplomat (2014), online: The Diplomat <>; Ashok SAJJANH, “Taking Stock of India's ‘Act East Policy’”, ORF Issue Brief (2016), online: ORF Issue Brief <>.

50 Biswajit DHAR, “Are Free Trade Agreements a Dead End for India?” East Asia Forum (2014), online: East Asia Forum <>.

51 ANUKOONWATTAKA, Witada and MIKIC, Mia, eds., India: A New Player in Asian Production Networks? Studies in Trade and Investment 75 (Bangkok: United Nations Publications, 2011).

52 Ram Upendra DAS and Jay Dev DUBEY, “Mechanics of Intra-Industry Trade and FTA: Implications for India in RCEP”, Research and Information System for Developing Countries, Discussion Paper No. 190, March 2014; PALIT, Amitendu, The Trans Pacific Partnership, China and India: Economic and Political Implications (Abingdon: Routledge, 2014); PALIT, Amitendu, “RCEP: An Indian Perspective” in DAS, Sanchita Basu and KAWAI, Masahiro, eds., Trade Regionalism in the Asia-Pacific: Development and Future Challenges (Cambridge: Cambridge University Press, 2016), 170.

53 CHAKRABORTY, Debashis, “Picking the Right Alternative: Should India Participate in TPP Instead of RCEP?” in CHAISSE, Julien, GAO, Henry, and LO, Chang-fa, eds., Paradigm Shift in International Economic Law Rule-Making: TPP as a New Model for Trade Agreements? (Singapore: Springer, 2017), 501.

54 The Associated Chambers of Commerce and Industry of India, “India ASEAN Trade and Investment Relations: Opportunities and Challenges” (2016), online: ASSOCHAM <>.

55 Association of Southeast Asian Nations, “ASEAN-China Free Trade Agreements”, online: ASEAN < 2>.

56 Association of Southeast Asian Nations, “ASEAN-Korea Free Trade Agreement”, online: ASEAN <>.

57 Association of Southeast Asian Nations, “Agreement on Comprehensive Economic Partnership among Member States of the Association of Southeast Asian Nations and Japan”, online: ASEAN <>.

58 HAYTER, Roger and EDGINGTON, David W., “Flying Geese in Asia: The Impacts of Japanese MNCs as a Source of Industrial Learning” (2004) 95 Tijdschriftvoor Economische en Sociale Geografie 3.

59 United Nations Conference on Trade and Development, “Trade Facilitation in Regional Trade Agreements” (New York/Geneva: UNCTAD, 2011).

60 CHAKRABORTY, Debashis and KUMAR, Animesh, “ASEAN and China: New Dimensions in Economic Engagement” (2012) 48 China Report 327.

61 Ibid.; Higgins, supra note 35 at 13.

62 H.A.C. PRASAD, “Reviving and Accelerating India's Exports: Policy Issues and Suggestions”, Department of Economic Affairs, Ministry of Finance, New Delhi, Working Paper No. 1/2017-DEA, January 2017.

63 Lili Yan ING, Santiago Fernandez de CORDOBA, and Olivier CADOT, “Non-Tariff Measures in ASEAN”, Economic Research Institute for ASEAN and East Asia and United Nations Conference on Trade and Development, April 2016.

64 “India Urges Singapore, S. Korea and Japan to Sign MRAs on Degrees” Live MINT (26 August 2016).

65 “Malaysia Says Non-tariff Barriers Hinder Asean-India Trade Ties” The Hindu Business Line (31 August 2014).

66 The World Bank, “ASEAN Services Integration Report”, World Bank, Report No: ACS14299, 2016.

67 Ministry of Commerce and Industry, “India's Request List to Indonesia”, online: MCI <>; and Ministry of Commerce and Industry, “India's Request List to Malaysia”, online: MCI < >, particularly pertaining to movement of professionals (Mode 4) and horizontal commitments may be referred to as cases in point.

68 “Big Wins for Reforms after Loss in Bihar” The Economic Times (11 November 2015).

69 Press Information Bureau Government of India, Ministry of Commerce & Industry, “World Bank Doing Business 2017 Report” (2016), online: PIB <>.

70 The World Bank, “India Jumps Doing Business Rankings with Sustained Reform Focus” (2017), online: The World Bank <>.

71 The World Bank, “International LPI Global Rankings 2018”, online: The World Bank <>.

72 Shujiro URATA, “Constructing and Multilateralizing the Regional Comprehensive Economic Partnership: An Asian Perspective”, Asian Development Bank Institute Working Paper No. 449, December 2013.

73 Ibid.

74 Chakraborty and Sengupta, supra note 38.

75 Urata, supra note 72, at 13.

76 World Trade Organization, “Trade Policy Review: India” (Geneva: WTO, 2015).

77 Association of Southeast Asian Nations, “Rules of Origin Criteria of ASEAN's Free Trade Agreements” (4 January 2018), online: ASEAN < >.

78 Asian Development Bank, “Asia Regional Integration Centre (ARIC)-Comparative FTA Toolkit”, online: ADB <>.

79 Article 21 of ASEAN-Japan FTA: Measures to Safeguard the Balance of Payments: “Nothing in this Chapter shall be construed to prevent a Party from taking any measure for balance-of-payment purposes. A Party taking such measure shall do so in accordance with the conditions established under Article XII of GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement.”

80 Article 9 of ASEAN-Korea FTA Safeguard Measures: 1. “Each Party which is a WTO member retains its rights and obligations under Article XIX of GATT 1994 and the WTO Agreement on Safeguards. Actions taken pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards shall not be subject to the Agreement on Dispute Settlement Mechanism under the Framework Agreement […].”

81 MATSUSHITA, Mitsuo, SCHOENBAUM, Thomas J., MAVROIDIS, Petros C., and HAHN, Michael, The World Trade Organization: Law, Practice, and Policy (Oxford: Oxford University Press, 2015) 409. On safeguard measures, see CHAISSE, Julien, CHAKRABORTY, Debashis, and KUMAR, Animesh, “Mastering a Two-edged Sword: Lessons from the Rules and Litigation on Safeguards in the World Trade Organization” (2014) 13 Richmond Journal of Global Law and Business 563.

82 Art. 12 of AIFTA: “General Exceptions: Each Party retains its rights and obligations under Article XX of GATT 1994, which shall be incorporated, mutatis mutandis, into and form an integral part of this Agreement.”

83 See VENZKE, Ingo, “Making General Exceptions: The Spell of Precedents in Developing Art. XX into Standards for Domestic Regulatory Policy” (2011) 12 German Law Journal 1111; VENZKE, Ingo, How Interpretation Makes International Law: On Semantic Change and Normative Twists (Oxford: Oxford University Press, 2012) 150; CHAISSE, Julien, “Exploring the Confines of International Investment and Domestic Health Protections-Is a General Exceptions Clause a Forced Perspective” (2013) 39 American Journal of Law & Medicine 332; BARTELS, Lorand, “The Chapeau of the General Exceptions in the WTO GATT and GATS Agreements: A Reconstruction” (2015) 109 American Journal of International Law 95.

84 Art. 7.3 of ASEAN-China FTA: “Measures to strengthen co-operation shall include, but shall not be limited to: promotion and facilitation of trade in goods and services, and investment, such as: i) standards and conformity assessment; ii) technical barriers to trade/non-tariff measures; and iii) customs co-operation.”

85 Art. 14.3 of AIFTA: “For prompt customs clearance of goods traded among the Parties, each Party, recognising the significant role of customs authorities and the importance of customs procedures in promoting trade facilitation, shall endeavour to: (a) simplify its customs procedures; and (b) harmonise its customs procedures, to the extent possible, with relevant international standards and recommended practices such as those made under the auspices of the World Customs Organization.”

86 VOON, Tania, “United States-Measures Affecting the Production and Sale of Clove Cigarettes” (2012) 106 American Journal of International Law 824.

87 Chapter 5 regulates the Standard, Technical Regulations and Conformity Assessment Procedures in detail.

88 Art. 7 of ASEAN-Korea FTA: “WTO Disciplines Subject to the provisions of this Agreement and any future agreements as may be agreed pursuant to the reviews of this Agreement by the Parties under Article 15, the Parties hereby agree and reaffirm their commitments to abide by the provisions of the WTO disciplines as set out in Annexes 1A and 1C to the WTO Agreement, which include, among others, non-tariff measures, technical barriers to trade (hereinafter referred to as ‘TBT’), sanitary and phytosanitary (hereinafter referred to as ‘SPS’) measures, subsidies and countervailing measures, anti-dumping measures and intellectual property rights.”

89 Chapter 4 of ASEAN-Japan FTA regulates Sanitary and Phytosanitary Measures in detail.

90 MARCEAU, Gabrielle and TRACHTMAN, Joel P., “A Map of the World Trade Organization Law of Domestic Regulation of Goods: The Technical Barriers to Trade Agreement, the Sanitary and Phytosanitary Measures Agreement, and the General Agreement on Tariffs and Trade” (2014) 48 Journal of World Trade 351.

91 Ibid., at 352.

92 Art. 46 of ASEAN-Japan FTA: “Cooperation: 1. For the purposes of ensuring that standards, technical regulations and conformity assessment procedures do not create unnecessary obstacles to trade in goods among the Parties, the Parties shall, where possible, cooperate in the field of standards, technical regulations and conformity assessment procedures … .”

93 Art. 4 of ASEAN-China TFA: “Trade in Services With a view to expediting the expansion of trade in services, the Parties agree to enter into negotiations to progressively liberalise trade in services with substantial sectoral coverage. Such negotiations shall be directed to: … (c) enhanced co-operation in services between the Parties in order to improve efficiency and competitiveness, as well as to diversify the supply and distribution of services of the respective service suppliers of the Parties.”

94 Art. 7.2. of ASEAN-China FTA: “Co-operation shall be extended to other areas, including, but not limited to, banking, finance, tourism, industrial co-operation, transport, telecommunications, intellectual property rights, small and medium enterprises (SMEs), environment, bio-technology, fishery, forestry and forestry products, mining, energy and sub-regional development.”

95 ASEAN-Korea FTA, supra note 88.

96 Siew-Kuan NG, Elizabeth, “Intellectual Property Interoperability in ASEAN and Beyond” in Siew-Kuan NG, Elizabeth and Austin, Graeme W., eds., International Intellectual Property and the ASEAN Way: Pathways to Interoperability (Cambridge: Cambridge University Press, 2017), 3 at 21–2.

97 Art. 7.1. of ASEAN-China FTA: “The Parties agree to strengthen their co-operation in 5 priority sectors as follows: (b) information and communications technology.”

98 “ASEAN FTAs: An overview” Business Times (12 July 2018), online: Business Times <>.

99 International Trade Centre, “Trade Map Database”, online: ITC <>.

100 For instance, India has been negotiating the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation Free Trade Area [BIMSTEC FTA], which involves Thailand, since 2014.

101 Asian Development Bank, supra note 78.

102 CHAISSE, Juliene and CHAKRABORTY, Debashis, “Normative Obsolescence of the WTO Anti-Dumping Agreement: Topography of the Global Use and Misuse of Initiations and Measures” (2016) 6 Asian Journal of International Law 233.

103 World Bank, Organization for Economic Co-operation and Development, IDE-JETRO and World Trade Organization, “Measuring and Analyzing the Impact of GVCs on Economic Development”, 2017.

104 Rahul SEN and Sadhana SRIVASTAVA, “Integrating into Asia's International Production Networks: Challenges and Prospects for India” in Anukoonwattaka and Mikic, eds., supra note 51 at 78.

105 Organization for Economic Cooperation and Development, “Trade in Value Added (TIVA) database”, online: OECD <>.

106 NAG, Biswajit, “Emerging Production Network Between India and ASEAN: An Analysis of Value Added Trade in Select Industries” in CHAKRABORTY, Debashis and MUKHERJEE, Jaydeep, eds., Trade, Investment and Economic Development in Asia: Empirical and Policy Issues (Abingdon: Routledge, 2016), 41.

107 CHAKRABORTY, Debashis and CHAKRABORTY, Anushree, “Economic and Political Cooperation between India and East Asia: The Emerging Perspective” (2017) 4 Journal of Economics and Political Economy 144.

108 Mia MIKIC, “Integrating into Asia's International Production Networks: Challenges and Prospects for India” in Anukoonwattaka and Mikic, eds., supra note 51 at 120.

109 Richard M. ROSSOW, “India's FDI Reforms under Modi: Once a Fountain, Now a Drip” US-India Insight (15 August 2017), online: US-India Insight <>.

110 DHL and IBM, “Artificial Intelligence in Logistics: A Collaborative Report by DHL and IBM on Implications and Use Cases for the Logistics Industry” (2018), online: <>.

111 Digital India Resources, “Artificial Intelligence & Merging Technologies” (12 February 2018), online: <>.

112 Sudipta GHOSH and Indranil MITRA, “Artificial Intelligence and Robotics-2017: Leveraging Artificial Intelligence and Robotics for Sustainable Growth” ASSOCHAM India and PWC (March 2017), online: ASSOCHAM India and PWC <>.

113 Fukunari KIMURA, Tomohiro MACHIKITA, and Yasushi UEKI, “Technology Transfer in ASEAN Countries: Some Evidence from Buyer-Provided Training Network Data”, Economic Research Institute for ASEAN and East Asia, ERIA Discussion Paper No. 40, May 2015.

114 Ibid.

115 “National Strategy for Artificial Intelligence”, The National Institution for Transforming India, Discussion Paper, June 2018.

116 DOUGHERTY, Sean M., HERD, Richard, and CHALAUX, Thomas, “What Is Holding Back Productivity Growth in India? Recent Microevidence” (2009) 1 OECD Journal: Economic Studies 1; United Nations Industrial Development Organization, Indian Manufacturing Industry: Technology Status and Prospects (Vienna: UNIDO, 2009).

117 MUKHERJEE, Arpita, PAL, Parthapratim, DEB, Saubhik, RAY, Subhobrota, and GOYAL, Tanu M., Special Economic Zones in India: Status, Issues and Potential (New Delhi: Springer, 2016).

118 Dipanjan Roy CHAUDHURY, “Japan's Investments in India Getting Diverse” The Economic Times (27 May 2017).

119 Pritam BANERJEE, “Development of East Coast Economic Corridor and Vizag-Chennai Industrial Corridor: Critical Issues of Connectivity and Logistics”, Asian Development Bank, ADB South Asia Working Paper Series No. 50, February 2017.

120 Deepshikha SIKARWAR, “Gold Jewellery Imports from ASEAN to Face 12.5% Countervailing Duty” The Economic Times (17 March 2016).

121 “Anti-dumping Duty Imposed on Import of Telecom Gear from Chinese Firms” Hindustan Times (27 April 2016).

122 Nayanima BASU, “Trade Remains Sore Point Between India, ASEAN” The Hindu Business Line (24 January 2018).

123 Arpita MUKHERJEE and Avantika KAPOOR, “India and Trade Facilitation in Services (TFS) Agreement: Concerns and Way Forward”, Indian Council for Research on International Economic Relations, ICRIER Working Paper No. 347, October 2017.

124 “Trump Administration Tells Court Decision to Revoke Work Permits to H4 Visa Holders Within 3 Months” The Economic Times (22 September 2018).

125 Vikas DHOOT, “MPs Fret over Trade Deficit with ASEAN” The Hindu (26 August 2017).

126 Fan HE and Panpan YANG, “China's Role in Asia's Free Trade Agreements” (2015) 2 Asia & The Pacific Policy Studies 416.

127 V.S. SESHADRI, “Emerging Dynamics on RCEP”, Research and Information System for Developing Countries, RIS Policy Brief No. 85, October 2018.

128 Transnational Institute, “RCEP: A Secret Deal” (July 2018), online: TNI <>.

129 “RCEP Talks to Go Beyond 2018, India Claims Big Gains” The Economic Times (5 September 2018).