In an effort to increase bilateral trade and investment, India signed its 16th trade agreement to date (the Comprehensive Economic and Trade Agreement, or CETA) with the UK. India has also signed these agreements with other countries, including Japan, Korea, Australia, and the four-nation European bloc known as EFTA.
Five trade agreements have been signed by the nation since 2014 with countries including the UK, EFTA, Australia, Mauritius, and the United Arab Emirates.
What is a Free Trade Agreement?
A free trade agreement is an agreement between two or more nations that, in addition to removing non-trade barriers on a sizable portion of partner country imports and relaxing regulations to encourage services exports and bilateral investments, also agrees to eliminate or lower customs duties on the maximum quantity of goods traded between them.
These agreements include ten to thirty different topics. Currently, there are more than 350 free trade agreements in effect worldwide, and the majority of countries have signed one or more of them.
Countries with which India Signed FTA
India has signed trade agreements with the Association of Southeast Asian Nations (ASEAN), a group of ten countries, Bhutan, Thailand, Singapore, Malaysia, Korea, Japan, Australia, the United Arab Emirates, Mauritius, and the European Free Trade Association (EFTA), which consists of Iceland, Liechtenstein, Norway, and Switzerland.
Additionally, India is currently negotiating trade agreements with several of its trading partners. The US, Oman, the EU, Peru, and Israel are all parties to the ongoing negotiations.
Due to certain political concerns, negotiations for a similar agreement with Canada were halted.
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Benefits of these Free Trade Agreements
These trade agreements have strengthened strategic alliances, improved market access, decreased tariff and non-tariff trade obstacles, and supported domestic industry through fair trade facilitation.
When taken as a whole, these free trade agreements show a deliberate shift towards comprehensive, high-quality agreements that assist India's integration into robust global value chains, exports of services, and domestic manufacturing.
India-UK FTA Key Points
In an effort to double trade between the two economies from the current level of roughly USD 56 billion by 2030, India and the UK negotiated a "landmark" trade agreement that will lower the cost of importing whisky and cars from Britain and eliminate taxes on the export of labor-intensive goods like leather, footwear, and apparel.
India would lower import taxes on UK-sourced Scotch whisky and gin to 75% at first, and then to 40% by the tenth year. It is currently 150 percent.
Car import duties will drop from nearly 100% to 10% as a result of both sides' quotas.
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