Pacific Money | Economy | South Asia

What the ‘Mother of All Trade Deals’ Learned From the India-ASEAN FTA

India has spent the last 16 years paying for its trade deal with ASEAN. The India-EU FTA would not repeat those mistakes.

Indian Prime Minister Narendra Modi, President of the European Council António Costa and President of the European Commission Ursula von der Leyen witness the Exchange of MoUs between India and EU, in Hyderabad House, New Delhi on January 27, 2026.

India and the European Union finally shook hands and signed the landmark Free Trade Agreement on January 27, 2026. This deal was widely described as the “mother of all deals” because it took nearly two decades of stalled negotiations to complete. A formal detente in 2022 and a relaunch led to a comprehensive package of 23 chapters covering goods, services, digital trade, and sustainability. 

For those who lived through the negotiation of India’s first major trade agreement, the ASEAN-India Trade in Goods Agreement (AITIGA) of 2009, this stirred up memories. The ASEAN-India deal marked a pivotal shift: India, for the first time since liberalization in 1991, opened up its markets to a multi-country regional bloc, fundamentally moving away from its protectionist trade policies. 

The AITIGA came into force in January 2010. The services agreement followed in November 2014 – after ASEAN had already secured full access to India’s large domestic market for goods. The goods sector was of interest to ASEAN at that time, while India had an established services sector. By agreeing to sequence them back then, India surrendered its primary bargaining leverage. New Delhi then waited in vain for services reciprocity that never fully materialized. 

Using its new market access, ASEAN drove India’s trade deficit from approximately $7.5 billion per year before the FTA to over $44 billion after. Even though India’s exports to ASEAN grew 65 percent in the decade after the FTA, its imports surged 186 percent over the same period. The services agreement finally arrived well over four years later, but it offered a weak and tardy means to balance the already ballooned equation.

As one of the negotiators on the Indian side during that period, the lesson learned was clear and hard: Do not conclude a deal until all parties are on board. 

Other failures made a bad deal worse: weak rules of origin, tariff asymmetry, and institutional gaps. The India-EU free trade agreement tries to address these flaws and offers a template for the AITIGA review. 

Under the AITIGA, a product could qualify as “ASEAN-origin” with just 35 percent value addition in an ASEAN country. In other words, up to 65........

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