Free trade agreements of India explained

India is party to free trade agreements (FTAs) and other trade agreements with many countries and trade blocs, and is negotiating with many others. As of 2022, India has preferential access, economic cooperation and FTA with more than 50 individual countries.

The negotiations for the Comprehensive Economic Partnership Agreement between India and the United Arab Emirates were completed in 88 days, which was the shortest time span for any free trade agreement signed by India.[1]

Overview

There are different types of trade agreements that enable preferential market access between India and signatory countries or trade blocs - preferential trade agreements (PTA), free trade agreements (FTA), and Comprehensive Economic Cooperation Agreements (CECA) and Comprehensive Economic Partnership Agreements (CEPA).[2]

A preferential trade agreement (PTA) involves two or more partners agreeing to reduce tariffs on an agreed number of tariff lines (products). The list of products on which the partners agree to reduce duty is called the positive list. In general, PTAs do not cover substantially all trade. The India Mercosur Preferential Trade Agreement is an example of a PTA.[2]

A free trade agreement (FTA) also involves reducing or eliminating tariffs on items traded between the partner countries; however each maintains individual tariff structure for non-members. The key difference between an FTA and a PTA is that PTAs have a positive list of products on which duty is to be reduced, while an FTA uses a negative list on which duty is not reduced or eliminated. Thus, compared to a PTA, FTAs are generally more ambitious in coverage of tariff lines on which duty is to be reduced. The India Sri Lanka Free Trade Agreement is an example of an FTA.[2]

Comprehensive Economic Cooperation Agreement (CECA) and Comprehensive Economic Partnership Agreement (CEPA) are agreements which consist of an integrated package on goods, services and investment, as well as trade facilitation and rule-making in areas such as intellectual property, government procurement, technical standards and sanitary and phytosanitary issues. The India Korea CEPA is one such example and it covers a broad range of other areas such trade facilitation, customs cooperation, investment, competition, intellectual property rights etc. CECA/CEPAs are more comprehensive and ambitious than FTAs in terms of coverage of areas and the type of commitments. While a traditional FTA focuses mainly on goods, a CECA/CEPA provides holistic coverage of many areas like services, investment, competition, government procurement, disputes etc. Further, a CECA/CEPA looks deeper into the regulatory aspects of trade than an FTA. Due to this, it encompasses mutual recognition agreements (MRAs) that cover the regulatory regimes of the partners. An MRA recognises different regulatory regimes of partners on the presumption that they achieve the same end objectives.[2]

Bilateral agreements

!Country!Agreement name!Type!Signed!Effective!Ref.
AfghanistanIndia Afghanistan Preferential Trade AgreementPTA6 March 200313 May 2003[3] [4]
AustraliaAustralia–India Comprehensive Economic Cooperation Agreement (AI-CECA)CECA2 April 202229 December 2022[5] [6]
ChileIndia Chile Preferential Trade AgreementPTA8 March 200611 September 2007[7]
JapanJapan India Comprehensive Economic Partnership Agreement (JICEPA) CEPA16 February 20111 August 2011
MalaysiaIndia Malaysia Comprehensive Economic Cooperation Agreement (IMCECA)CECA8 February 20111 July 2011
MauritiusIndia Mauritius Comprehensive Economic Cooperation and Partnership AgreementCECPA22 February 20211 April 2021
ThailandIndia Thailand Free Trade AgreementFTA9 October 20031 September 2006[8]
SingaporeIndia Singapore Comprehensive Economic Cooperation AgreementCECA29 June 20051 August 2005
India Korea Comprehensive Economic Partnership Agreement (IKCEPA) CEPA7 August 20091 January 2010
Sri LankaIndia Sri Lanka Free Trade Agreement (ISFTA)FTA28 December 19981 March 2000[9]
United Arab EmiratesIndia UAE Comprehensive Economic Partnership AgreementCEPA18 February 20221 May 2022[10] [11]

Under negotiation

Proposed

Multilateral agreements

Agreement nameTypeCountries/Trading BlocSignedEffectiveRef.
Asia-Pacific Trade Agreement (APTA)PTABangladesh, China, Laos, Mongolia, South Korea, Sri Lanka1975
ASEAN-India Trade in Goods AgreementCECA13 August 20091 January 2010
ASEAN-India Trade in Services AgreementNovember 20141 July 2015[19]
ASEAN-India Investment AgreementNovember 20141 July 2015
Global System of Trade Preferences (GSTP)PTA41 countries13 April 198819 April 1989
India Mercosur Preferential Trade AgreementPTA25 January 20041 June 2009
South Asia Free Trade Agreement (SAFTA)FTASouth Asian Association for Regional Cooperation (SAARC)6 January 20041 January 2006
India EFTA Trade and Economic Partnership AgreementTEPAEFTA10 March 2024

Under negotiation

Abandoned proposals

See also

Notes and References

  1. Web site: ANI . India UAE Trade: India-UAE trade deal to be operationalised from May 1: Piyush Goyal . 29 March 2022 . 2022-04-05 . The Times of India . en.
  2. Web site: FAQ on FTA . Department of Commerce . 5 April 2022 . 9 April 2014.
  3. Web site: India-Afghanistan PTA . 2022-04-05 . Department of Commerce . en.
  4. Web site: India-Afghanistan Preferential Trading Agreement Free Trade Agreement . 2022-04-05 . aric.adb.org.
  5. Web site: 2022-04-03 . India, Australia sign FTA, trade likely to 'double in 5 yrs, generate 1 mn jobs' . 2022-04-05 . The Indian Express . en.
  6. Web site: India-Australia FTA kicks off, nearly 96% exports get free access . Moneycontrol . 29 December 2022 . 30 December 2022 . en.
  7. Web site: India-Chile Preferential Trading Agreement Free Trade Agreement . 2022-04-05 . aric.adb.org.
  8. Web site: Annual Report 2021-2022 . Department of Commerce . 5 April 2022 . 80–109.
  9. Web site: Free Trade Agreement . Noida Special Economic Zone . 19 June 2022.
  10. Web site: What is India – UAE CEPA, how it will benefit both economies? . 2022-04-05 . gulfnews.com . 19 February 2022 . en.
  11. News: Suneja . Kirtika . India-UAE free trade pact comes into force . The Economic Times . 2022-05-10.
  12. Web site: 2022-03-12 . India, Canada formally agree to step up talks over FTA . 2022-04-05 . Hindustan Times . en.
  13. Web site: India's Trade Agreements - At a Glance . 2022-04-05 . www.dezshira.com. 11 January 2018 .
  14. Web site: https://economictimes.com/news/economy/foreign-trade/india-oman-free-trade-agreement-likely-to-be-inked-next-month-official/amp_articleshow/106296361.cms&ved=2ahUKEwjL743fi8aDAxXo-DgGHZZdBh8QFnoECCIQAQ&usg=AOvVaw0HdcbePNkhEQCrZS5pYVnN .
  15. Web site: https://www.livemint.com/economy/trade-deals-india-exploring-renewed-negotiations-with-new-zealand-south-africa-for-new-fta-deals-11719386100973.html.
  16. Web site: India, UK Free Trade Agreement to boost cooperation in tourism, technology, startups, education, says Piyush Goyal . ANI News . 5 April 2022 . en.
  17. Web site: 2021-10-10 . India looks to sign FTA with Oman . 2022-04-05 . Muscat Daily . en.
  18. Web site: 2023-08-17 . Preparation of free trade agreement with Peru and Chile, many countries are interested in this with India. 2023-08-17 . Sangri Today . en.
  19. Web site: ASEAN-India Free Trade Area (AIFTA) . 5 April 2022 . ASEAN.
  20. Web site: India, Russia-led Eurasian bloc to begin negotiations on FTA soon . 27 December 2023 .
  21. Web site: India, EU set to resume free trade talks after 9-year gap . Hindustan Times . 19 June 2022 . en . 19 June 2022.
  22. Web site: India, GCC Agree To Pursue Free Trade Agreement; Resume Talks: Piyush Goyal . Outlook . 30 December 2022.
  23. News: Rcep Trade Agreement: India decides to opt out of RCEP, says key concerns not addressed . The Economic Times . 5 November 2019 . 5 April 2022.

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