FTA benefits elude India

The high import and low export trend is likely to continue with free-trade agreements under negotiation

- AJAY SRIVASTAVA

free-trade agreement (FTA) is a pact between countries to make trade easier by reducing tariffs and other barriers on imports from each other. Globally, over 350 FTAs are currently in force.

Over the past four years, India has signed FTAS with Mauritius, the UAE, Australia, and the European Free Trade Association, or EFTA, countries (Switzerland, Norway, Iceland, and Liechtenstein). Agreements with the UK and Oman are nearly finalised.

India has a total of 14 trade agreements with 25 countries and is negotiating new deals with over 50 countries, including the European Union (EU) and the US-led Indo-Pacific Economic Framework.

Additionally, India has six smaller trade agreements with 26 other countries. Soon, India will have FTAs with all major economies except China. However, India and China do have limited tariff concessions on about 25 per cent of tariff lines under the Asia-Pacific Trade Agreement.

From financial year (FY) 2019 to FY2024, India's exports to its 21 FTA partners grew by 14.48 per cent, from $107.20 billion to $122.72 billion. Imports increased by 37.97 per cent, from $136.20 billion to $187.92 billion. These FTA partners include six South Asian Free Trade Area (Safta) countries (including Sri Lanka), 10 Association of Southeast Asian Nations (Asean) countries, and Japan, South Korea, the UAE, Mauritius, and Australia.