With a summit days away, the review of the India-ASEAN goods agreement remains stuck on rules of origin, as New Delhi presses to close what it says is a channel for Chinese goods and Southeast Asian capitals press for market access.
NEW DELHI, November 7, 2026 – The long-running review of the ASEAN-India Trade in Goods Agreement remains deadlocked with the India-ASEAN Summit less than two weeks away, and a resolution now appears unlikely before early 2027, according to reporting published on November 5 by the business news service Whalesbook.
The summit is scheduled for November 17 in the Philippines. The review, which has been under way through the agreement’s Joint Committee since 2024 and which both sides once hoped to conclude in 2025, will arrive at that meeting without a landing zone on its central question.
That question is rules of origin, and behind it sits a third country that is not party to the agreement at all.
The numbers that drive the dispute
India’s trade position with the ten-member Association of Southeast Asian Nations has deteriorated steadily since the agreement entered into operation in 2010.
For the 2025 to 2026 financial year, Whalesbook reported total bilateral trade of 128.38 billion dollars, composed of Indian imports from ASEAN of 89.96 billion dollars and Indian exports to ASEAN of 38.41 billion dollars. The resulting deficit stands at 51.55 billion dollars.
The trajectory matters as much as the level. Analysis published by the Council for Strategic and Defense Research recorded an Indian deficit with ASEAN of 43.57 billion dollars in the 2022 to 2023 financial year. In 2024 to 2025, by that account, Indian exports to ASEAN fell 5.77 percent to 38.96 billion dollars while imports rose 5.65 percent to 84.16 billion dollars. Exports down, imports up, deficit widening, across a period in which the agreement was fully in force.
The asymmetry of the original bargain is part of the explanation. According to the same analysis, India eliminated duties on 74.2 percent of its tariff lines under the agreement, against roughly 3 percent before it. ASEAN’s headline figure of 76.4 percent looks comparable but is inflated by Singapore, which already granted essentially complete duty-free access and therefore conceded nothing. Strip Singapore out and the picture changes: Indonesia liberalised 50.1 percent of lines and Vietnam 69.7 percent.
India, in short, opened more than most of its counterparties and received less than the aggregate statistic suggested.
Rules of origin and the China question
The specific demand New Delhi has brought to the review is for stricter rules of origin, and the rationale is explicit.
India argues that goods originating in third countries, principally China, are routed through Southeast Asian jurisdictions, undergo minimal processing, and then enter India claiming ASEAN origin and the preferential tariff treatment that comes with it. The practical effect, on India’s account, is that the agreement functions as a side door into the Indian market for a country with which India has no preferential arrangement and with which it runs its largest bilateral deficit.
The Council for Strategic and Defense Research analysis identified subsidised steel as a particular concern and pointed to the absence of a melt-and-pour clause as a specific loophole. A melt-and-pour rule confers origin on steel at the point where the metal is melted and first cast, rather than at the point of a later rolling, coating or forming operation. Without it, steel melted in one country can be processed in another and acquire that second country’s origin, with the tariff consequences that follow. The European Union adopted a melt-and-pour requirement in its 2026 steel regulation, and the concept has become a standard ask in steel-related trade negotiations.
Whalesbook reported that tighter origin rules would, on New Delhi’s assessment, assist domestic textile, chemical and electronics manufacturers. Those are precisely the sectors where Indian industrial policy has concentrated capacity-building investment and where the gap between Indian and Chinese cost structures is most acute.
ASEAN capitals read the demand differently. Stricter origin rules increase compliance burden on exporters, require more detailed production records, and in the case of regional value content thresholds can disqualify goods made through genuine regional supply chains that happen to incorporate significant non-ASEAN inputs. Southeast Asian manufacturing is deeply integrated with Chinese component supply. A rule designed to catch transhipment will also catch legitimate regional production that uses Chinese inputs, and ASEAN negotiators have resisted accordingly.
Two different agendas
The review has struggled in part because the two sides want different things from it.
Whalesbook characterised the divergence directly: ASEAN members want greater market access in India, while India is focused on removing non-tariff barriers that hinder its exporters in Southeast Asia.
Those are not symmetric asks. Market access is granted by lowering a tariff line, a measurable and negotiable concession. Non-tariff barriers are diffuse. The Council for Strategic and Defense Research analysis listed product standards, certification requirements and sanitary and phytosanitary norms as the categories most affecting Indian pharmaceuticals, agriculture and processed foods. Removing them requires regulatory cooperation, mutual recognition arrangements and administrative change in multiple jurisdictions, none of which fits neatly into a tariff schedule.
The result is a negotiation in which one side offers something it can quantify and asks for something the other side finds difficult to deliver, while the other side does the same in reverse.
Where the process stands
The review has been running through the AITIGA Joint Committee since 2024. The Council for Strategic and Defense Research analysis recorded nine negotiating rounds completed, with the conclusion once targeted for October 2025. That deadline passed.
The fifteenth meeting of the Joint Committee took place in Jakarta in October 2026. According to Whalesbook, sub-committees were instructed to accelerate work on institutional frameworks, but no definitive agreement was reached. The next formal assessment is scheduled for January 2027 in India.
That timetable means the November 17 summit will take place without a concluded review. Summits of this kind generally produce a chairman’s statement reaffirming commitment and setting a new target date. Whether the leaders’ meeting generates enough political impetus to move the technical negotiation is the open question, and the history of the past two years does not encourage optimism.
Neither the Indian Ministry of Commerce and Industry nor the ASEAN Secretariat issued comment that appeared in the sources consulted for this report, and the Whalesbook account did not quote named officials.
The strategic context
The deadlock sits inside a wider reordering of Asian trade relationships.
India declined to join the Regional Comprehensive Economic Partnership in 2019, principally over concerns about import surges from China and the adequacy of safeguards. The AITIGA review is, in a sense, India working through the same concerns within an agreement it did join. If the review fails to deliver origin discipline, the Indian domestic argument that trade agreements with Asian partners function as conduits for Chinese goods will be strengthened, with consequences for every subsequent negotiation India undertakes.
ASEAN, meanwhile, has moved faster on its upgrade of the ASEAN-China Free Trade Area than on the India review, a sequencing that the Council for Strategic and Defense Research analysis identified as having eroded Indian trust. From the Southeast Asian perspective the sequencing reflects commercial reality: China is the larger trading partner for most ASEAN members by a wide margin, and the returns to deepening that relationship are correspondingly larger.
There is also a broader context of external pressure. Through 2026, Southeast Asian economies have been managing tariff exposure in their largest export market outside the region, and the regional policy conversation has been dominated by that question. Bandwidth for a difficult negotiation with India has been limited.
Economic analysis
What would a successful review actually change?
On tariffs, less than the headline suggests. The agreement already delivers substantial duty elimination. Additional market access in India would concentrate in the lines India held back in 2009, which are predominantly agricultural, automotive and textile lines protected for domestic political reasons. Those are the hardest lines for India to concede and will be conceded last if at all.
On origin, potentially a great deal. If India secured product-specific rules with meaningful value-addition thresholds, a melt-and-pour requirement for steel, and stronger verification and certification procedures, the practical effect would be to raise the cost of using ASEAN as a routing jurisdiction. Trade flows would respond. Some volume currently entering India as ASEAN-origin would either be re-routed, re-sourced, or would enter at most-favoured-nation rates with the duty paid.
The size of that effect is genuinely uncertain, because the scale of transhipment is contested. India’s claim is based on the divergence between the growth of ASEAN exports to India and the growth of ASEAN domestic production capacity in the relevant categories. ASEAN’s position is that its manufacturing base is real, its regional supply chains are genuine, and that India is seeking protection through origin rules that it could not obtain through tariffs.
On non-tariff barriers, the gains would accrue to Indian pharmaceutical, agricultural and processed food exporters, sectors where India has demonstrated global competitiveness but faces regulatory friction across Southeast Asia. Mutual recognition of pharmaceutical inspections alone would be commercially significant. These are, however, the slowest gains to realise, because they depend on regulatory agencies rather than trade ministries.
Implications for importers and supply chains
Companies trading between India and Southeast Asia should plan for a prolonged period of uncertainty and for an eventual tightening rather than a loosening of origin discipline.
Origin documentation is the first priority. Importers claiming preferential treatment on ASEAN-origin goods entering India should ensure that their certificates of origin are supported by production records capable of surviving verification, including bills of materials, supplier declarations for non-originating inputs, and records of the processing actually performed. Indian customs has increased origin verification activity under its origin rules framework, and retrospective duty recovery with interest is a live exposure. That exposure exists today regardless of the review’s outcome.
Second, scenario planning on value-addition thresholds. If India secures higher regional value content requirements, goods that currently qualify at the margin will cease to qualify. Companies should calculate the regional value content of their India-bound ASEAN production under both current and plausible tightened thresholds, and should identify which product lines are at risk. For electronics assembly in particular, where Chinese component content is frequently high, the margin is often thin.
Third, steel-specific preparation. A melt-and-pour requirement, if adopted, would be transformative for steel and steel-derivative flows. Any company importing flat or long steel products or steel-intensive articles into India from ASEAN origins should begin documenting the location of melting and first casting now. The European Union’s adoption of an equivalent requirement means that the documentation infrastructure increasingly exists in global steel trade, which lowers the cost of compliance but also removes the excuse for not having it.
Fourth, the alternative-route question. India has signalled, and analysts including the Council for Strategic and Defense Research have noted, that expanded bilateral agreements with individual Southeast Asian partners, particularly Singapore, Malaysia and Indonesia, are seen in New Delhi as a pragmatic alternative to a stalled regional review. Companies should watch for bilateral negotiations opening, since a bilateral arrangement with one ASEAN member could produce different and better terms than the regional agreement for goods originating there.
Fifth, the tail risk. Full Indian withdrawal from the agreement is regarded as unlikely, but the analysis notes that the idea has gained some traction in Indian policy discussion. Any company whose India business model depends on preferential ASEAN-origin access should understand what its cost base looks like at most-favoured-nation rates, even if it assigns the scenario a low probability. The exercise is cheap and the information is useful in negotiation.
What to watch
Three markers will indicate whether the review is moving.
The first is the language of the summit statement on November 17. A statement that sets a specific date and a specific deliverable on rules of origin would be meaningfully different from one that reaffirms commitment in general terms. The latter has been the pattern.
The second is the January 2027 assessment in India. Whether the sub-committees instructed in Jakarta to accelerate work on institutional frameworks have produced anything concrete will be visible then, and it is the last realistic opportunity to conclude the review before the negotiation enters a fourth year.
The third is Indian unilateral action. If the review continues to stall, the instruments available to New Delhi do not depend on ASEAN agreement. Tighter domestic origin verification rules, expanded use of anti-dumping and safeguard measures against goods entering through ASEAN routes, and anti-circumvention investigations can all deliver a portion of what India is seeking at the negotiating table. India’s trade remedies directorate has been active, and the pattern of recent cases against Chinese chemical and metal products includes investigations that touch circumvention through third countries. Reporting this week also noted increased Indian scrutiny of hydraulic rock breaker imports from Malaysia over suspected anti-dumping duty evasion, an example of exactly that enforcement route in operation.
The negotiation, in other words, has an alternative. If ASEAN will not supply origin discipline through the agreement, India can approach the same objective through trade remedies and customs enforcement, less efficiently and with more friction, but without anyone’s consent. That alternative is the quiet leverage sitting beneath a summit that is otherwise unlikely to resolve very much.
The institutional problem
Part of why the review has stalled lies in how the agreement is structured to be changed.
AITIGA is an agreement between India and a bloc, but the bloc negotiates by consensus and its members have divergent interests in this negotiation. Singapore, having already granted full duty-free access, has nothing to concede and limited incentive to accommodate Indian demands that would burden its re-export trade. Vietnam, with deep manufacturing integration into Chinese component supply, has the most to lose from stricter origin rules. Indonesia, with the lowest liberalisation ratio among the larger members, is the most exposed to Indian demands for reciprocal market opening. The Philippines, Thailand and Malaysia each sit somewhere in between.
A consensus-based counterparty negotiating with a single state produces a characteristic outcome: the bloc’s position converges on its least forthcoming member. India is effectively negotiating against Vietnam’s position on origin and Indonesia’s position on tariffs, while being asked to deliver concessions to all ten.
Indian negotiators have been explicit in internal discussion that this structure is part of the problem, and that is why the alternative of bilateral agreements with individual members has gained attention. A bilateral negotiation with Indonesia or Malaysia would allow trade-offs that the regional format cannot accommodate.
The institutional sub-committee work ordered at the Jakarta meeting in October, which Whalesbook reported covered institutional frameworks specifically, suggests that both sides recognise the procedural dimension. Whether a better process can resolve a substantive disagreement is a different question.
The sectoral picture
The disagreement is not uniform across sectors, and the sectoral detail explains why a global package has been hard to assemble.
In textiles, India seeks both origin discipline and market access, and faces competition from Vietnam and Bangladesh in the same third markets. Vietnamese textile exports to India have grown, and Indian producers argue that the fabric and yarn content is frequently Chinese.
In chemicals, India has been building capacity under production-linked incentive schemes and has simultaneously run a dense programme of anti-dumping cases against Chinese chemical imports. Imports arriving through ASEAN that would face duties if shipped directly from China are, from the Indian industry’s perspective, the clearest illustration of the origin problem.
In electronics, the integration argument is strongest on the ASEAN side. Electronics assembly in Vietnam, Malaysia and Thailand genuinely uses Chinese components at high proportions, and a strict regional value content rule would disqualify much of it. India’s own electronics assembly industry, built under the same incentive programmes, uses Chinese components at comparable proportions, which complicates the Indian argument considerably.
In agriculture and processed foods, the flow runs the other way. Indian exporters face standards, certification and sanitary requirements across Southeast Asia that they describe as disproportionate. Palm oil, which dominates Indonesian and Malaysian exports to India, is the single largest line in the bilateral trade and is subject to Indian duty adjustments that Southeast Asian producers watch closely.
In steel, the melt-and-pour question is live and quantifiable. India has become a net importer of certain steel categories and has used safeguard and anti-dumping measures in response. Steel entering through ASEAN with limited transformation is the most concrete and most documented version of the circumvention claim.
A negotiation that can produce different answers in each of these sectors is more likely to succeed than one seeking a single horizontal rule, and the shift toward product-specific rules of origin in modern agreements reflects that. Whether the AITIGA review lands on that approach is one of the things the January 2027 meeting should reveal.