India’s Free Trade Agreements

Free Trade Agreement

Free Trade Agreements (FTAs) are arrangements between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tariff and non-tariff barriers on substantial trade between them. Free Trade Agreements (FTAs), normally cover trade in goods such as agricultural or industrial products or trade in services such as banking, construction, trading etc. Free Trade Agreements can also cover other areas such as Intellectual Property Rights (IPRs), investment, government procurement etc.

In Free Trade Agreements (FTAs), tariffs on items covering substantial bilateral trade are eliminated between the partner countries; however each maintains individual tariff structure for non-members. 

Free Trade Agreements (FTAs), are generally more ambitious in coverage of tariff lines (products) on which duty is to be reduced. In an FTA there is a negative list on which duty is not reduced or eliminated.

The tariff concessions in an FTA are implemented at the ground level through customs notifications. In the case of phased implementation of concessions, the notifications are issued on a yearly basis.

Major Free Trade Agreements (FTAs) of India are as shown in the following table:

S No.AcronymGroupingsNumberMember Countries Name
1India ASEAN TIGIndia ASEAN Trade in Goods Agreemnent111. Brunei 2. Cambodia 3. Indonesia 4. Laos 5. Malaysia 6. Myanmar 7. Philippines 8. Singapore 9. Thailand 10. Vietnam 11 India
2SAFTASouth Asia Free Trade Agreement71. India 2. Pakistan 3. Nepal 4. Sri Lanka 5. Bangladesh 6. Bhutan 7. Maldives
3ISLFTAIndo Sri Lanka FTA21. India 2. Sri Lanka
4IMCECAIndo Malaysia CECA21. India 2. Malaysia
5ISCECAIndia Singapore CECA21. India 2. Singapore
6JICEPAJapan India CEPA21. India 2. Japan
7IKCEPAIndia Korea CEPA21. India 2. South Korea

Rules of Origin (RoO)

The Rules of Origin, therefore, become important in the context of making an assessment on the application of preferential tariff under an FTA. Hence, without the rules of origin, the preferential tariffs under an FTA cannot be implemented.

Rules of origin (ROO) are the criteria needed to determine the country of origin of a product for purposes of international trade. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports.

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