Kuala lumpur: The upcoming upgrade of the ASEAN-India Trade in Goods Agreement (AITIGA) and the expansion of semiconductor collaboration with India are poised to redefine the economic relationship between ASEAN and India, according to an analyst.
According to BERNAMA News Agency, during the 22nd ASEAN-India Summit, which coincided with the 47th ASEAN Summit and Related Meetings, Prime Minister Anwar Ibrahim highlighted the significant progress made with AITIGA, noting that ASEAN is committed to concluding the agreement by the end of the year. Jaideep Singh, an analyst at the Institute of Strategic and International Studies (ISIS) Malaysia, remarked that the year-end target is achievable, given that ASEAN and India have already conducted at least nine rounds of negotiations.
Singh emphasized the necessity of updating the 15-year-old agreement to align with current trade developments, including enhancements in digital and paperless trade, as well as streamlined trade facilitation procedures. The review also provides an opportunity to update tariff schedules, modernize rules of origin, and promote mutual recognition of qualifications. Singh stressed the importance of addressing non-tariff barriers and improving free trade agreement utilization among small and medium-sized enterprises.
Semiconductors, Singh noted, provide a strategic complementarity between ASEAN and India. ASEAN countries are key players in assembly, testing, and packaging, while India is emerging as a hub for electronics manufacturing and design. Recent collaborations, such as Malaysia’s plans for a memorandum of cooperation on semiconductors with India, following Singapore’s memorandum of understanding signed last year, highlight this potential. An October 2025 MoU between the Advanced Semiconductor Academy of Malaysia (ASEM) and the Indian Institute of Technology Madras aims to strengthen Malaysia’s position in the semiconductor value chain.
According to ASEM, this partnership seeks to secure a foothold in India’s burgeoning US$100 billion semiconductor market, paving the way for investments, joint ventures, and co-development opportunities that will enhance Malaysia’s competitiveness as a design-led economy. Singh suggested that these collaborations could serve as a model for similar initiatives, potentially linking Southeast Asian and Indian firms along the semiconductor value chain.
On broader regional cooperation, Dr. Yanitha Meena Louis, another analyst from ISIS Malaysia, highlighted India’s Act East Policy and the ASEAN-India comprehensive strategic partnership (CSP) as robust frameworks for regional initiatives beyond trade, including maritime security, disaster relief, and the blue economy. She noted the importance of aligning Indian-led initiatives like the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure with ASEAN’s long-term goals.
As a first responder in the region, India has demonstrated its commitment to supporting ASEAN during disasters and is well-positioned to leverage its CDRI framework for disaster relief cooperation. Additionally, India could use its strategic position within the Indian Ocean Rim Association to collaborate on building the blue economy with ASEAN partners.
In conclusion, the combination of trade liberalization through AITIGA, high-value semiconductor cooperation, and broader regional initiatives positions ASEAN and India to deepen economic ties and set the stage for the next phase of their partnership.