The ASEAN-India DSM Agreement: A Boost to Trade and Investment

The Association of Southeast Asian Nations (ASEAN) and India signed the ASEAN-India Free Trade Area (AIFTA) in 2009, aiming to enhance economic cooperation and reduce trade barriers. As a further step towards deepening economic integration, the ASEAN-India Dispute Settlement Mechanism (DSM) Agreement was signed on June 30, 2021, to provide a legal framework for resolving trade and investment disputes.

What is the DSM Agreement?

The DSM Agreement sets out procedures for resolving disputes between investors and states arising from investment agreements and treaties. It establishes a mechanism for arbitration and conciliation, with an aim to resolve disputes in a timely and effective manner. The DSM will be operated by an ASEAN-India Joint Committee on Dispute Settlement, which will consist of representatives from each party.

Benefits of the DSM Agreement

The DSM Agreement is expected to provide several benefits to both ASEAN and India, including:

1. Increased investor confidence: The DSM Agreement provides a legal framework for investors to resolve disputes, which will significantly increase their confidence in investing in the region. The agreement also entails transparency, predictability, and impartiality in the dispute resolution process, which will inspire confidence among investors.

2. Enhanced economic cooperation: The DSM Agreement will facilitate greater economic cooperation between ASEAN and India by removing barriers to trade and investment. This will result in the creation of new business opportunities and job opportunities.

3. Promotion of rule of law: The DSM Agreement will promote the rule of law, which is essential for economic development and sustainable growth. The agreement helps to ensure that investors can operate in a predictable and stable environment, which is good for economic activity.

4. Resolution of disputes: The DSM Agreement will provide a mechanism for resolving disputes that arise between investors and states. This will help to avoid costly and time-consuming court cases, which can deter investment.

Conclusion

The ASEAN-India DSM Agreement is a significant step towards deepening economic integration between the two parties. It provides a legal framework for resolving trade and investment disputes, which will increase investor confidence, facilitate economic cooperation, promote the rule of law, and resolve disputes in a timely and effective manner. The DSM Agreement is expected to boost trade and investment between ASEAN and India, creating new business opportunities and job opportunities.