Asean-India free trade agreement: Analysis of agriculture sector

The ASEAN-India Free Trade Agreement (AIFTA) which came into existence in 2010, is considered as one of the largest Free Trade Agreements in the world. Around 24 per cent of India's global agricultural trade is with ASEAN countries. The study has analysed the status and impact of AIFTA on agricultural trade between India and ASEAN countries. It was found that, FTA with the ASEAN is trade creating than trade diverting in agriculture which will benefit consumer eventually leads to net welfare effect to the economy. The substantial tariff reduction by India will benefit the ASEAN countries to increase their market share of agricultural commodities in India. In order to see the benefit accrues to India, study employed partial equilibrium analysis using SMART model developed by the World Bank to simulate the impact of tariff reduction by major ASEAN countries on major agricultural commodities exported by India. The results indicated that, India can gain market access in Cambodia, Vietnam and Thailand as they offer substantial tariff reduction for range of agricultural products exported by India. The commodities like marine products, meat products, milled products, fruits are the major exporting products that will increase the share in ASEAN market.