is a type of trade policy that allows traders to act and transactwithout interference from government. According to the law of comparative advantagethe policy permits trading partners mutual gains from trade of goods and services.Under a free trade policy, prices are a reflection of true supply and demand, and are thesole determinant of resource allocation. Free trade differs from other forms of tradepolicy where the allocation of goods and services amongst trading countries aredetermined by artificial prices that do not reflect the true nature of supply and demand.These artificial prices are the result of protectionist trade policies, whereby governmentsintervene in the market through price adjustments and supply restrictions. Suchgovernment interventions generally increase the cost of goods and services to bothconsumers and producers.Cumulation is the relationship between different FTAs regarding the rules of origin —sometimes different FTAs supplement each other, in other cases there is no cross-cumulation between the FTAs. A free trade area is a result of a free trade agreement (aform of trade pact) between two or more countries. Free trade areas and agreements(FTAs) are cascadable to some degree — if some countries sign agreement to formfree trade area and choose to negotiate together (either as a trade bloc or as a forum of individual members of their FTA) another free trade agreement with some externalcountry (or countries) — then the new FTA will consist of the old FTA plus the newcountry (or countries).The aim of a free trade area is to so reduce barriers to easy exchange that trade cangrow as a result of specialisation, division of labor, and most importantly via (the theoryand practice of) comparative advantage. The theory of comparative advantage arguesthat in an unrestricted marketplace (in equilibrium) each source of production will tend tospecialize in that activity where it has comparative (rather than absolute) advantage.The theory argues that the net result will be an increase in income and ultimately wealthand well-being for everyone in the free trade area. However the theory refers only toaggregate wealth and says nothing about the distribution of wealth. In fact there may besignificant losers, in particular among the recently protected industries with acomparative disadvantage. The proponent of free trade can, however, retort that thegains of the gainers exceed the losses of the losers.Our study revolves around the implications of a free trade economy and its feasibility inthe current economic scenario.Features of free trade1) Trade of goods without taxes by means of special quotas or removal of restrictions.2) Removal of restrictions on trade limitations.