FTA Agreements with India: An Overview
Free Trade Agreements (FTAs) are becoming increasingly popular among countries to boost their trade and investment. One such country that has been actively pursuing FTAs with various nations is India. In this article, we will take a closer look at the FTA agreements that India has signed and how they benefit the country.
What is an FTA?
An FTA is a trade agreement between two or more countries to reduce barriers to trade, such as tariffs and quotas, to increase the flow of goods and services between them. FTAs are typically negotiated between countries that want to increase their trade and investment ties. By doing so, they can access new markets, increase the variety of available goods and services, and lower prices for consumers.
India`s FTA Agreements
India has signed FTA agreements with several countries, including Singapore, South Korea, Japan, ASEAN (Association of Southeast Asian Nations), and Sri Lanka. These agreements cover a wide range of sectors, from manufacturing to services.
Singapore-India Comprehensive Economic Cooperation Agreement (CECA)
India`s first FTA agreement was signed with Singapore in 2005. The Singapore-India Comprehensive Economic Cooperation Agreement (CECA) covers trade in goods, services, and investment. The agreement provides for the removal of tariffs on 85% of all Singapore exports to India and vice versa. Singapore is India`s second-largest trading partner in ASEAN.
South Korea-India Comprehensive Economic Partnership Agreement (CEPA)
The South Korea-India Comprehensive Economic Partnership Agreement (CEPA) was signed in 2009. This FTA agreement covers a wide range of sectors, including goods, services, investment, and intellectual property rights. This agreement provides for the removal of tariffs on 92% of all South Korean exports to India and vice versa.
Japan-India Comprehensive Economic Partnership Agreement (CEPA)
The Japan-India Comprehensive Economic Partnership Agreement (CEPA) was signed in 2011 and came into effect in 2012. This FTA agreement covers trade in goods, services, and investment. This agreement provides for the removal of tariffs on 94% of all Japanese exports to India and vice versa. Japan is one of India`s largest trading partners, with bilateral trade between the two countries reaching $17.6 billion in 2020.
ASEAN-India Free Trade Area (AIFTA)
India signed the ASEAN-India Free Trade Area (AIFTA) agreement in 2009. This FTA covers trade in goods, services, and investment between India and the ten ASEAN member states. The agreement provides for the removal of tariffs on 75% of all ASEAN exports to India and vice versa.
Sri Lanka-India Free Trade Agreement (FTA)
India signed the Sri Lanka-India Free Trade Agreement (FTA) in 2000. This FTA covers trade in goods and services between the two countries. The agreement provides for the removal of tariffs on 90% of all Sri Lankan exports to India and vice versa.
Benefits of FTA Agreements for India
FTAs provide numerous benefits for India, including:
1. Increased export opportunities – By reducing trade barriers, FTAs allow Indian businesses to access new markets and increase their exports.
2. Lower prices for consumers – As tariffs are reduced or eliminated, the prices of imported goods become lower, benefitting Indian consumers.
3. Improved economic growth – Increased trade and investment can lead to improved economic growth and job creation in India.
4. Improved investment climate – FTAs provide a stable and predictable framework for investment, which can attract foreign investment into India.
Conclusion
The FTA agreements that India has signed with various countries have opened up new opportunities for trade and investment and have helped to improve the country`s economic growth. These agreements have also led to the removal of tariffs, making imported goods cheaper for Indian consumers. With India`s growing economy and population, it is expected that the country will continue to pursue more FTA agreements in the future.