Benefits of FTAs

 According to an SBI report, Free Trade Agreements (FTAs) help enhance India’s resilience in the face of global tariff challenges. The report emphasizes that India’s strategy of forging FTAs will not only boost bilateral trade but also open new opportunities in digital trade.

About FTAs

FTAs are agreements between two or more countries or trading blocs to reduce or eliminate customs tariffs and non-tariff barriers on substantial trade between them. These agreements cover trade in goods (such as agricultural or industrial products), services (such as banking, construction, trading, etc.), and areas like intellectual property rights (IPs).

Benefits of FTAs

• Easier Access to Foreign Markets: By removing tariff and non-tariff barriers, FTAs provide smoother entry into international markets.
• Opportunities for Small and Medium Enterprises (SMEs): The tariff concessions within FTAs offer new export opportunities for SME products.
• Other Benefits: FTAs help address behind-the-border barriers, encourage investment, improve e-commerce regulations, and promote regional integration.

India and FTAs

In the past five years, India has signed 13 FTAs with trading partners like Mauritius, the UAE, and Australia to strengthen export-oriented domestic manufacturing (SBI Report).

Examples: India-ASEAN Trade in Goods Agreement, South Asia Free Trade Agreement, etc.

India is also currently negotiating FTAs with the UK, Canada, and the European Union.

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