Authors : Sahasra V.; Nithiya Sri V.; Yukaciny S.; Krithika V.; P. Deepalakshmi; Dr. D. P. Sivasakti Balan; R. J. Thayumanaswamy

Volume/Issue : Volume 11 - 2026, Issue 6 - June

Google Scholar : https://tinyurl.com/4ta7ujbc

Scribd : https://tinyurl.com/ypxj5yed

DOI : https://doi.org/10.38124/ijisrt/26jun133

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Abstract : Using a quantitative research design, this study analyzes trade data from the UN Comtrade Database, the International Monetary Fund (IMF), India's Ministry of Commerce, and the Reserve Bank of India (RBI). The research tracks overall trade metrics alongside specific high-volume imports under the Harmonized System (HS) code classification system. The data reveals that India became highly dependent on ASEAN imports for critical industrial inputs and raw materials, particularly Electronics (HS 85), Machinery (HS 84), and Palm Oil (HS 15). Conversely, competitive Indian exports were held back by strict Non-Tariff Barriers (NTBs) in ASEAN markets and undermined by weak Rules of Origin (RoO) enforcement, which allowed third-party countries like China to route cheap goods into India duty-free through ASEAN hubs. The findings show that this heavy influx of cheap imports hurt India's domestic economy. It created inverted duty structures that made local manufacturing less competitive, reducing the effectiveness of national industrial initiatives like Make in India and Production Linked Incentive (PLI) schemes. Additionally, vulnerable domestic sectors—including small businesses (MSMEs) and plantation agriculture (rubber, tea, and palm oil)—faced intense financial pressure. While India's services sector generated a steady surplus through digital exports, ASEAN’s strict limits on the movement of professionals (Mode 4) prevented it from growing enough to offset the massive merchandise deficit. The study concludes that the current trade framework is unsustainable for India. It provides an empirical blueprint to guide ongoing re-negotiations for the updated trade pact, recommending stricter rules of origin to stop third-party dumping, reciprocal actions to dismantle nontariff barriers, and re-aligned tariff structures to protect domestic industries.

Keywords : Asean-India Free Trade Agreement (AIFTA), Trade Asymmetry, Structural Deficit, Tariff Elasticity, Rules of Origin (Roo), Non-Tariff Barriers (NTBs), Value Chain Integration.

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