India`s Free Trade Agreements with Foreign Countries: A Comprehensive Guide

India, being the seventh-largest country in the world by land area and the second-most populous in the world, has a vast economy that is constantly growing and expanding. In recent years, India has been pursuing a more robust trade policy with other countries by entering into free trade agreements (FTAs). An FTA is an agreement between two or more countries that eliminates or reduces trade barriers such as tariffs, quotas, and other regulatory obstacles to trade. By doing so, FTAs aim to increase trade and investment between the countries involved.

India has signed FTAs with numerous countries, including ASEAN, Japan, South Korea, Singapore, and the European Union. Additionally, India is currently negotiating FTAs with several other countries, including Australia, Canada, and the United Kingdom. Although FTAs can be beneficial for countries in terms of increasing exports and foreign investment, they have their fair share of critics who argue that they can have negative impacts on domestic industries and local employment.

Let`s take a closer look at India`s FTAs with some of its major trading partners.

ASEAN-India Free Trade Agreement

The ASEAN-India Free Trade Agreement (AIFTA) was signed in 2009 and covers trade in goods, services, and investments. The agreement aims to eliminate or reduce tariffs on 75% of goods traded between the two regions and gradually eliminate tariffs on the remaining 25% of goods. Since the implementation of AIFTA, trade between India and ASEAN has increased significantly, from $28.8 billion in 2009-10 to $80.8 billion in 2019-20. However, some domestic industries in India have raised concerns about increased competition from ASEAN countries.

India-Japan Comprehensive Economic Partnership Agreement

The India-Japan Comprehensive Economic Partnership Agreement (CEPA) was signed in 2011 and covers trade in goods, services, and investments. The agreement has eliminated or reduced tariffs on a range of products and services and has also introduced provisions for intellectual property rights, competition policy, and government procurement. Since its implementation, trade between India and Japan has increased to $16.87 billion in 2021. However, there have been concerns about Japan`s non-tariff barriers to trade, such as technical regulations and standards.

India-South Korea Comprehensive Economic Partnership Agreement

The India-South Korea Comprehensive Economic Partnership Agreement (CEPA) was signed in 2009 and covers trade in goods, services, and investments. The agreement has reduced or eliminated tariffs on a wide range of products and services and has also incorporated provisions on intellectual property, competition policy, and government procurement. Since its implementation, trade between India and South Korea has increased significantly, from $12.4 billion in 2009-10 to $21.3 billion in 2019-20. However, some domestic industries in India have raised concerns about increased competition from South Korea.

India-Singapore Comprehensive Economic Cooperation Agreement

The India-Singapore Comprehensive Economic Cooperation Agreement (CECA) was signed in 2005 and covers trade in goods, services, and investments. The agreement has eliminated tariffs on 80% of Singapore`s exports to India and 75% of India`s exports to Singapore. Additionally, it has provisions on intellectual property rights, government procurement, and competition policy. Since its implementation, trade between India and Singapore has increased significantly, from $7.7 billion in 2005-06 to $18.9 billion in 2019-20.

India-European Union Free Trade Agreement

The India-European Union Free Trade Agreement (FTA) has been under negotiation since 2007. The agreement aims to reduce or eliminate tariffs on a wide range of products and services and has provisions on investment, intellectual property rights, and government procurement. However, negotiations have been stalled for several years due to disagreements on issues such as data protection, intellectual property rights, and market access.

In conclusion, India`s FTAs with other countries aim to increase trade and investment between the countries involved. While some domestic industries in India have raised concerns about increased competition from these countries, the overall impact on India`s economy has been positive. As India continues to negotiate and implement FTAs with other countries, it is important to strike a balance between the benefits of increased trade and investment and the potential negative impacts on domestic industries and employment.