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Asean India Free Trade Agreement Upsc

By December 3, 2020 Uncategorised No Comments

ASEAN-India trade increased by more than 22% per year over the 2005-2011 period. India-ASEAN trade increased by more than 37% in 1964-2002 to $79 billion, more than the $70 billion target set in 2009. [8] India had a trade deficit in all major trade agreements, with the exception of the South Asia Free Trade Agreement (SAFTA). Regional trade agreements (RTA) have been increasingly common since the early 1990s. RTAs cover more than half of international trade and work within the framework of the World Trade Organization (WTO) alongside global multilateral agreements. The first eleven years (1995-2005) of the WTO were supplemented by a tripling of the ATR from 58 to 188. Currently, 455 RTAs are in force worldwide. 14 ATRs are in force in India and a dozen more are being negotiated. Today, regional trade agreements go beyond tariff reductions in merchandise trade and include several other elements, such as liberalization in the services sector, investment, etc. India`s first RTA was the Bangkok Agreement in 1975. In 2005, this regional initiative between developing countries was reincarnated as an Asia-Pacific Trade Agreement (APTA). India`s first bilateral free trade agreement with Sri Lanka (ISFTA) came into force in March 2000.

Recognizing this development and recognizing the economic potential for closer ties, both sides recognized opportunities to deepen trade and investment relations and agreed to negotiate a framework agreement to pave the way for the creation of an ASEAN-India Free Trade Area (FTA). [7] The challenge is not only customs barriers, but also non-tariff barriers applied by most Member States, including China. Market access has become more difficult than tariffs themselves, even among Member States. India has the lowest non-tariff barriers in the region and China has the highest. RCEP accounts for a quarter of global GDP, 30% of world trade, 26% of foreign direct investment and 45% of the world`s population. What has changed after these agreements have been signed? At the 10th ASEAN-India Summit in New Delhi on 20 December 2012, India and ASEAN concluded negotiations on free trade agreements on services and investment. Both sides expect bilateral trade to rise to $100 billion by 2015 and $200 billion within a decade. [8] Trade data with the free trade agreement partners before and after the implementation of the agreement indicate that our trade has increased significantly. In addition, studies show that the increase in the share of imports of raw materials, intermediate goods and capital goods could lead to an improvement in the efficiency of domestic production and, consequently, an increase in exports. The overall impact of a free trade agreement on trade is positive and statistically significant.

Nevertheless, it is the ASEAN Free Trade Agreement that appears to have the greatest impact on trade, which makes sense, given that this agreement results in the largest reduction in Indian import tariffs. Liberalisation under the India-ASEAN Free Trade Agreement covers 75% of two-way trade. India has proposed approximately 9,000 products (at the 8-digit HS level) to eliminate tariffs (NT-1, NT-2) of approximately 12,000 tariff lines, 1,800 sensitive-track lines and nearly 1,300 excluded lines. For example, India held about 10% of its tariffs excluding it, thailand, the Philippines, Myanmar, Brunei and Vietnam held more tariffs excluding India. Motor vehicles, textiles, petroleum products, sugar, wheat, plant-based dairy products and other food products were excluded/sensitive from the Indian list, as India offers a higher preferential margin under free trade agreements and the increase in imports is much greater than the increase in exports to India. According to the FY`16 business survey, the average effect of a free-to-air agreement