After more than twenty meetings of the ASEAN-India Trade Negotiating Committee (AITNC) and four rounds of ASEAN-India Economic Ministers' meetings, India and ASEAN have finally agreed to kick start the FTA in goods. The ASEAN-India FTA in goods will be signed at the 7th ASEAN-India Summit, scheduled to be held in Bangkok in December 2008. India has agreed to reduce the import tariff on crude palm oil to 37.5 per cent and on refined palm oil to 45 per cent. While India conceded to the demands of Indonesia, Malaysia and Vietnam over palm oil and Coffee, Thailand conceded to the Indian position over rubber. Despite their stated demand of reducing the Indian negative list to 400, ASEAN finally agreed to India's highly sensitive list of 489 items. The two sides have also agreed to commence soon the negotiations over a FTA in services, in which India enjoys comparative advantages.

Exhibiting several traits of the FTA negotiations and the constraints within which negotiating parties have interacted with each other, the processes of negotiation witnessed nuanced economic diplomacy, periodic stalemates, and high level political interventions to break the stalemate. However, the objective here is not to examine the complexity of resolved issues. Instead it is important to highlight important notions of India, which India needs to shed in the future should the country enter into similar trade negotiations.

First, during the initial years of negotiation, India acted as an overly cautious and over-protectionist player as evident from its initial offers in terms of a very high tariff regime, very long sensitive list of items and Rules of Origin. The over-stretched negotiations witnessed India bargaining for every decimal point while deliberating on an agreed level of tariff barriers. The issue of tariff barriers over certain products - palm oil, rubber, coffee and tea kept disrupting the negotiation process for more than three years. After all, how could India expect retaining high tariffs on palm oil, which constituted the single largest component of India's import from Malaysia and Indonesia, two principal players in ASEAN? The negotiation hit a road-block when ASEAN refused to further negotiate unless India reduced tariffs on these products. The Indian position seemed to have concentrated less on developing a trading bloc with a combined GDP of US$2,381 billion, and more on how to give minimum concessions to the ASEAN economies in order to safeguard their own domestic enterprises.

Second, a somewhat related image of India that came into the open was that of being a difficult partner and a novice player in the game of multilateral negotiations. While ASEAN had already gained experiences while negotiating FTAs with China, Japan and Korea, it was India's first ever experience of entering into any FTA negotiation with a regional bloc. The best example of being naïve was proposing the list of more than 1400 items under the highly sensitive list. The sheer number of items seems to have irked the ASEAN counterparts to such an extent that they came up with their own negative list of 1000 items and also threatened to stop the negotiation process. The ASEAN negotiators insisted on having not more than 400 items under the list. Finally the two sides reached to a compromise whereby, India has been allowed to keep its highly sensitive list to 489 items.

The two above-mentioned situations further manifest a complete lack of a clear-cut strategy on the part of India before it began negotiations with ASEAN. How could a protected Indian economy expect to retain a high level of trade protection while negotiating with already liberalized, more open, and less protected ASEAN economies? India seemed to have relied heavily on its previous easy experiences in the FTA negotiations (with Sri Lanka and Singapore) in the process of developing its strategy. While India kept a long list of sensitive items and negotiated an extremely limited FTA with Sri Lanka, the different nature of Singapore's economy (Singapore is not essentially an exporter of agro-products) made it very easy for India to keep a high list of sensitive items. Many of the ASEAN economies are also exporters of agricultural and allied products, which India imports. Therefore, it is not surprising to note that the negotiation revolved primarily around the issue of how much India can open its economy.

Moreover, the growing domestic opposition to the FTA negotiations both from the farmers' lobby and industrial houses implies that the government did not conduct adequate enquiries into the potential benefits of the proposed FTA on the overall Indian economy. Similarly, despite having comparative advantages over the services sector, the Indian negotiator did not push hard for the case of simultaneous negotiation over FTA in goods and services.

India must take these challenges into account while engaging in any future FTA negotiations and speedy commencement of the implementation of agreed provisions of ASEAN-India FTA in goods. Given the vastness of the Indian economy and its huge market size, India needs to replace its relative gains approach with the 'lose some, gain some' approach, which can further help India in getting integrated with the global economy and utilizing opportunities available elsewhere.