PMF IAS Test Series for UPSC Prelims Banner Ad
PMF IAS Test Series for UPSC Prelims Banner Ad
  • Context (TH): India and the Association of South East Asian Nations (ASEAN) will begin negotiations to “modernise” the 15-year-old free trade agreement (FTA).
  • ASEAN accounted for 11.3% of India’s global trade in 2022-23.
  • The ASEAN India Trade in Goods Agreement (AITGA) is expected to be completed by 2025.

A map of different countries/regions with flags Description automatically generated

Need to Renegotiate FTA

  • After the FTA, India’s trade deficit with ASEAN rose from $7.5 billion annually to $43.57 billion in FY23.
  • Incidences of re-routing of goods by China through the ASEAN countries cause duty losses.

New Expected Provisions

  • New elements of product-specific rules will make FTA more efficient.
  • Rules of Origin will be incorporated to increase market access and to stop Chinese circumvention.
  • Trade remedies will protect domestic industry against unfair trade practices or unforeseen surges in imports of goods.
  • No new areas, such as environment, labour, MSMEs or gender, will be added to avoid new issues.
  • Rules of Origin are the criteria used to determine the origin of a product to establish duty charges.

Types of Trade Agreements

  • Trade Agreement: Cooperation between two or more countries for specific trade or investment terms.

Free Trade Agreement

  • Two or more countries provide preferential trade terms, tariff concession, etc., to the partner country.
  • It is more detailed than a Preferential Trade Agreement with a “Negative list” of excluded items.

Preferential Trade Agreement (PTA)

  • Preferential right of entry is given by reducing duties on “Positive list” items.
  • Tariffs may be reduced to zero for some products, even in a PTA.
  • India signed a PTA with Afghanistan.

Comprehensive Economic Partnership Agreement (CEPA)

  • Besides the above cooperation, CEPA also includes the regulatory aspect of trade.
  • India has signed CEPAs with South Korea and Japan.

Comprehensive Economic Cooperation Agreement

  • It covers negotiation on trade tariffs and “Tariff Rate Quota” only.
  • It is not as comprehensive as CEPA.
  • India has signed CECA with Malaysia.

Framework agreement

  • Framework agreement primarily defines the scope and provisions of the potential deal.

Early Harvest Scheme

  • It is a precursor to an FTA/CECA/CEPA between two trading partners.
  • Before the conclusion of the actual FTA, countries identify certain products for tariff liberalisation.
Sharing is Caring !!

Newsletter Updates

Subscribe to our newsletter and never miss an important update!

Assured Discounts on our New Products!

Leave a Reply

Your email address will not be published. Required fields are marked *


Never miss an important update!