Free Trade Agreements (FTAs) provide resilience to India despite global tariff challenges: SBI Report | Current Affairs | Vision IAS
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Free Trade Agreements (FTAs) provide resilience to India despite global tariff challenges: SBI Report

Posted 18 Mar 2025

2 min read

Report highlights that India’s trade strategy of forging FTA would boost bilateral trade and create new opportunities in digital trade. 

About FTAs

  • FTAs are arrangements between two or more countries or trading blocs that agree to reduce or eliminate customs tariff and non-tariff barriers on substantial trade between them. 
  • It covers trade in goods (like agricultural or industrial products) or trade in services (like banking, construction, trading etc.) and also areas like intellectual property rights (IPs), etc. 

Benefits of FTAs

  • Easier access to foreign markets: By eliminating tariff and non-tariff barriers. 
  • Opportunities to Small and Medium Enterprises (SMEs): Tariff concessions give opportunities for exports of SMEs’ products. 
  • Others: Address behind-the-border barriers impeding trade, encourage investment; improve the rules affecting e-commerce, promote regional integration, etc. 

India and FTAs

  • India has signed 13 FTAs in the last five years with its trading partners like Mauritius, UAE, Australia, etc. to boost its export oriented domestic manufacturing (SBI Report). 
  • Example: India ASEAN Trade in Goods Agreement, South Asia Free Trade Agreement, etc 
  • It is currently negotiating FTAs with the UK, Canada, and the European Union. 

Other Key highlights of  the Report

  • Foreign Institutional Investor (FII) Inflows: During FY24, India received FII inflows of $41 billion, highest since FY16. 
  • Export Diversification: India has diversified its exports basket with value addition, exploring alternate areas and new supply chain algorithms. 
  • Tags :
  • FTA
  • Trade Agreements
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