Trade Deficit Dilemma: Assessing AIFTA's Impact on India’s ‎Bilateral Trade

  • Authors

    • Deepali Kanwar PhD Research Scholar, Amity School of Economics, Amity University, Noida, Uttar Pradesh, India
    • Dr Kavita Indapurkar Professor & Jt Administrator, Amity School of Economics, Amity University, Noida, Uttar Pradesh, India
    https://doi.org/10.14419/0zfjmz77

    Received date: June 23, 2025

    Accepted date: August 8, 2025

    Published date: September 8, 2025

  • ASEAN; FTA; Inverted Duty Structure; MFN; Trade; Trade Policy

  • Abstract

    The study examines the AIFTA agreement's impact on bilateral trade volumes and deficits, implying that one may find that the agreement has a ‎disproportionately positive impact on the ASEAN member states. The study employs a mixed-method approach to analyze structural changes-‎es in India's trade basket during the AIFTA period. It consists of a product-level analysis at the HS six-digit level for selected liberalized ‎goods, along with a comparative study of MFN and FTA tariff rates to determine their impact on bilateral trade. The study highlights unequal FTA-MFN tariffs for palm oil and pepper, and an inverted duty regime for aluminum and copper, thus emphasizing the need to go ‎deeper and carry out product-level analysis beyond trade deficit trends. Limited access to detailed preferential trade data restricts the ability ‎of AIFTA to carry out empirical analysis. Further research will require more advanced datasets and deeper product-level analysis to adequately track its impact. The study contributes to the AIFTA literature by developing tariff analysis methods and performing case studies to ‎create policy insights that would help in better tariff design under the Agreement‎.

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  • How to Cite

    Kanwar, D., & Indapurkar, D. . K. (2025). Trade Deficit Dilemma: Assessing AIFTA’s Impact on India’s ‎Bilateral Trade. International Journal of Accounting and Economics Studies, 12(5), 339-350. https://doi.org/10.14419/0zfjmz77