India`s Trade Agreements With Other Countries

Read also: Modi started as a free trade process but ends as protectionist It is essential to note that India has seen free trade agreements as an important instrument to improve its trade and investment and has signed a number of trade agreements with different countries or groups. Indeed, India is one of the best countries in Asia, with the maximum number of free trade agreements in operation, either under negotiation or proposed. According to the Asian Development Bank Institute, India currently has 42 trade agreements (including preferential agreements) either in force, signed, negotiated or proposed. Thirteen of them are in force, one is signed but not yet implemented, 16 are under negotiation and 12 are proposed/in consultation or study. Most of the existing free trade agreements between India and Asian countries are very different in terms of the level of their economic development. India has signed limited free trade agreements with Sri Lanka (1998) and Thailand (2003), as well as a series of preferential trade agreements (tariff concessions) with countries/blocs such as Afghanistan, Nepal, Chile and Mercosur. Improved intra-regional trade is needed to improve connectivity in the South Asian region. Such an initiative, facilitated by the movement of goods, services, people and knowledge, would allow access to new markets and attract foreign direct investment (FDI) in different sectors. The resulting economic growth would also play a key role in bridging the trust gap in the region and increase the opportunity costs of conflict. [5] Note: any customs union, common market, economic union, customs and monetary union, economic and monetary union is also a free trade area. In view of the dumping of imports through FTA partner countries and the diversion of imports from non-AA partner countries through FTA partner countries, the Ministry of Finance recently announced measures to strengthen the application of rules of origin (RoO) under free trade agreements. This policy letter analyzes the share of Indian trade with its neighbors. The data used comes from the World Bank`s World Integrated Trade Solution (WITS) database and the International Monetary Fund`s (IMF) Direction of Trade Statistics (DOTS) database.

All commercial values are expressed in U.S. dollars (US$). For India`s trade with South Asia, the volumes and shares of imports and exports analyzed are from 1988 to 2018; However, China`s trade figures with South Asia (excluding India) are between 1992 and 2018. The Indian government has been actively engaged in bilateral trade agreements with other so-called developing countries and the developed world. India is also part of SAFTA (South Asia Free Trade Agreement), BIMSTEC (with the aim of developing a free trade agreement), the Asia-Pacific Trade Agreement (a preferential trade agreement with Bangladesh, China, Laos, South Korea and Sri Lanka) and IBSA (the India-Brazil-South Africa triangle, which aims to develop a trilateral South-South free trade agreement). Despite these agreements, trade in the neighbourhood has fallen far short of its potential. This is an example of the fact that agreements alone are not enough to facilitate trade if trade barriers are not addressed holistically. The existence of para-tariffs, high logistics costs, inadequate infrastructure and continued informal trade, coupled with other non-tariff barriers (NTBs), are the main reasons for India`s low intra-regional trade in the neighbourhood.

As a result, trade costs remain abnormally high in South Asia. [8] EFTA[17] has concluded bilateral agreements with the following countries, including dependent areas – and blocs: a lack of comparative advantages in the region also hampers the prospects for increased regional trade, as foreseen by SAFTA. [9] Specialization and value chains are key drivers of international trade. . . .