India has been talking free trade agreements with several partners – both bilateral and regional – in a bid to boost export-oriented domestic manufacturing.
These FTAs cover a wide array of topics, such as tariff reduction impacting the entire manufacturing and the agricultural sectors; rules on services trade; digital issues such as data localization; intellectual property rights that may have an impact on the accessibility of pharmaceutical drugs; and investment promotion, facilitation, and protection.
India has signed 13 FTAs in the last five year with its trading partners, including the India-Mauritius Comprehensive Economic Corporation and Partnership Agreement (CECPA), India-UAE Comprehensive Partnership Agreement (CEPA – in effect from May 2022), and India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA – in effect from December 29, 2022).
India is actively negotiating with the UK, Canada, EU, and Israel to conclude FTAs.
List of major free trade agreements
India’s Trade Agreements: Grouping, Type of Arrangement, Status |
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Grouping |
Number of member countries |
Member countries |
Type of agreement, stage of implementation |
Asia-Pacific Trade Agreement (APTA) |
7 |
India, Bangladesh, China, South Korea, Sri Lanka, Lao PDR, Mongolia |
Preferential regional trade agreement, in effect |
India ASEAN Trade in Goods Agreement (India-ASEAN TIG) |
11 |
Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, and India |
Free trade agreement (FTA), in effect |
Bangladesh India Myanmar Sri Lanka Thailand Economic Cooperation (BIMSTEC) |
7 |
Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan, and Nepal |
FTA, under negotiation |
Global System of Trade Preferences (GSTP) |
42 |
Algeria, Argentina, Bangladesh, Benin, Bolivia, Brazil, Cameroon, Chile, Cuba, the Democratic People’s Republic of Korea, Ecuador, Egypt, Ghana, Guinea, Guyana, India, Indonesia, the Islamic Republic of Iran, Iraq, Libya, Malaysia, Mexico, Morocco, Mozambique, Myanmar, Nicaragua, Nigeria, Pakistan, Peru, Philippines, Republic of Korea, Singapore, Sri Lanka, Sudan, Thailand, Trinidad and Tobago, Tunisia, the United Republic of Tanzania, Venezuela, Vietnam, Zimbabwe, and Mercosur. |
PTA, in effect |
South Asia Free Trade Agreement (SAFTA) |
7 |
Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka |
FTA, in effect |
India Nepal Treaty of Trade |
2 |
India, Nepal |
Specified duty-free access to the Indian market on a non-reciprocal basis, in effect |
India Sri Lanka Free Trade Agreement (ISLFTA) |
2 |
India, Sri Lanka |
FTA, in effect |
India Mauritius Comprehensive Economic Cooperation and Partnership Agreement (India-Mauritius CECPA) |
2 |
India, Mauritius |
CECPA, in effect |
India Malaysia Comprehensive Economic Cooperation (IMCECA) |
2 |
India, Malaysia |
CECA, in effect |
India Singapore CECA |
2 |
India, Singapore |
CECA, in effect |
Grouping |
Number of member countries |
Member countries / participating states |
Type of agreement, stage of implementation |
Japan India Comprehensive Economic Partnership Agreement (JICEPA) |
2 |
India, Japan |
CEPA, in effect |
India Korea CEPA (IKCEPA) |
2 |
India, South Korea |
CEPA, in effect |
India EU Broad Based Trade and Investment Agreement (BTIA) |
28 |
India and the EU (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden) |
FTA, under negotiation |
India Israel FTA |
2 |
India, Israel |
FTA, under negotiation |
India Canada CEPA |
2 |
India, Canada |
CEPA, under negotiation |
India Peru FTA |
2 |
India, Peru |
FTA, under negotiation |
India Chile PTA |
2 |
India, Chile |
PTA, under negotiation |
India New Zealand FTA |
2 |
India, New Zealand |
FTA, under negotiation |
India Australia Comprehensive Economic Cooperation Agreement |
2 |
India, Australia |
ECTA, operational since December 29, 2022 |
India UK FTA |
2 |
India, UK |
FTA, Under negotiation |
India UAE Comprehensive Economic Partnership Agreement |
2 |
India, UAE |
CEPA, operational since May 1, 2022 |
Major Free Trade Agreements
ASEAN-India Free Trade Area
The signing of the ASEAN-India Trade Area (AIFTA) paved the way for the creation of one of the world’s largest free trade area markets, creating opportunities for over 1.9 billion people in ASEAN and India with a combined GDP of US$4.8 trillion. The agreement set off tariff liberalization on over 90 percent of products, including palm oil, pepper, black tea, and coffee.
Asia Pacific Trade Agreement
The Asia Pacific Trade Agreement (APTA), also known as the Bangkok Agreement, includes Bangladesh, India, Lao, China, Mongolia, South Korea, and Sri Lanka. APTA’s key objective is to hasten economic development among the participating countries.
The trade and investment liberalization measures covering merchandise goods and services aim to contribute to intra-regional trade and economic strengthening.
India-Japan Comprehensive Economic Partnership Agreement
The India-Japan Comprehensive Economic Partnership Agreement (CEPA) removes duties on almost 90 percent products traded between the two countries. Sectors that have benefited from the lower duties include textiles, pharmaceuticals, agricultural products, tea, petrochemical and chemical products, cement, and jewelry.
India-Republic of Korea Comprehensive Economic Partnership Agreement
South Korea reduced tariff on 17 Indian products, while India reduced import tariffs on 11 items. The agreement eases restrictions on foreign direct investments for both countries and will provide better access for the Indian service industry such as IT, engineering, and finance in South Korea.
India-Singapore Comprehensive Economic Partnership Agreement
The two countries have reduced or eliminated tariffs on several items. The trade agreement also eliminates tariff barriers, double taxation, duplicate processes and regulations, and provide unhindered access and collaboration between the financial institutions of Singapore and India.
South Asian Free Trade Area
South Asian Free Trade Area (SAFTA) aims to reduce custom duties of all traded goods to zero.
SAFTA categorized Bangladesh, Bhutan, Maldives, and Nepal as Least Developed Contracting States (LDCs), and India, Pakistan, and Sri Lanka as Non-Least Developed Contracting States (NLDCs).
The SAFTA Agreement provides for a phased tariff liberalization programme (TLP) under which, in two years, NLDCS would bring down tariffs to 20%, while LDCS will bring them down to 30%. Non-LDCS will then bring down tariffs from 20% to 0-5% in 5 years (Sri Lanka 6 years), while LDCS will do so in 8 years. NLDCs will reduce their tariffs for L.D.C. products to 0-5% in 3 years. This TLP would cover all tariff lines except those kept in the sensitive list (negative list) by the member states.
India-UAE Comprehensive Economic Partnership Agreement (CEPA)
The India-UAE CEPA is likely to benefit about US$ 26 billion worth of Indian products that are subjected to 5% import duty by UAE. Overall UAE is offering elimination of duties on 97 % of its tariff lines corresponding to 99% of imports from India. 90% of India’s total exports to the UAE in value terms would become duty free immediately upon entry into force of the CEPA.
The UAE’s immediate zero-duty market access offer to India covers all labor-intensive sectors such as gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals, medical devices, and Automobiles. UAE can also become a hub for sourcing of India’s capital goods and intermediates for further value-added exports to other destinations in Africa and Europe.
Also, for the first time in any Trade Agreement, a separate Annex on Pharmaceuticals has been incorporated to facilitate access of Indian pharmaceuticals products, especially automatic registration and marketing authorisation in 90 days for products approved by developed country regulators namely the United States (USFDA), the United Kingdom (UKMHRA), the European Union (EMA), and Japan (PMDA).
India-Australia CEPA
Australia’s parliament ratified the India-Australia Economic Cooperation and Trade Agreement (ECTA) on November 22. Under the India-Australia ECTA, duties on 100 percent tariff lines will be eliminated by Australia, covering 6,000 broad sectors. Meanwhile, India’s tariffs on 90 percent of Australian goods exports, including meat, wool, cotton, seafood, nuts, and avocados, will be removed.
Exporters, businesses, workers, and consumers in both markets are set to benefit from the trade liberalization, market opening, and freer movement of people.
Implementation of the trade agreement will create an estimated one million jobs as a boost in business is expected in several labor-intensive industries, including textiles and apparel, select agricultural and fish products, leather, footwear, furniture, sports goods, jewelry, machinery, electrical goods, and railway wagons.
Preferential Trade (PTAs)
India’s Preferential Trade Agreements seek to promote trade with other countries by lowering tariffs and providing access to new markets. This has helped ensure India’s position as a more appealing business location for exporters and importers.
Some strategic benefits of PTAs for India’s development, include improved technology transfer, increased integration, alignment with national standards, among others. A PTA is a formal trade agreement between countries that grants preferential access to specific products from participating countries by lowering tariffs and other trade restrictions.
India has signed six limited coverage Preferential Trade Agreements:
- Asia Pacific Trade Agreement (APTA);
- Global System of Trade Preferences (GSTP);
- SAARC Preferential Trading Agreement (SAPTA);
- India-Afghanistan PTA;
- India-MERCOSUR PTA; and
- India-Chile PTA.
Double Tax Avoidance Agreements (DTAAs)
India has one of the largest networks of tax treaties for the avoidance of double taxation and prevention of tax evasion. India has established over 94 comprehensive DTAAs and eight limited DTAAs, compared with China’s 110 and Vietnam’s 80. The purpose of such tax treaties is to develop a fair and equitable system for the allocation of the right to tax several types of income between the ‘source’ and ‘residence’ countries.