INTERNATIONAL TRADE

LAWS
MGNM803
Learning Outcomes

 You’ll be able to understand India’s regional trade relationships

Need

i. They create a wider trading area

ii. They make possible a more economic allocation of resources and
iii. They increase production and raise planes of living.
Importance

 to encourage investment,
 facilitate preferential access to larger competitive markets and
 accelerate economic growth
 RTAs are increasingly being viewed as a link between developing and
developed countries towards the common goal of economic development
and a gateway to global trade
 Slow progress on the recent WTO based multilateral trade talks and the
gradual erosion of faith in multilateralism has also given a new thrust to the
concept of regionalism as a highly effective tool for expanding international
trade, economic cooperation and global integration.
RTAs are commonly classified into the following categories

 Preferential Trade Agreements (PTA) -Preferential trade agreement is a

trading agreement giving preferential access to certain products from certain
countries. This involves reducing tariffs but not their elimination. 
 The South Asian Preferential Trade Arrangement (SAPTA) between
Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka was one
such agreement
 Free Trade Agreement (FTA)- A free trade agreement is the most
widespread form of RTAs. In an FTA, member countries eliminate or reduce
internal tariff and nontariff trade barriers (to trade in goods, and also
increasingly in services) among members, while each member is free to
maintain different most-favoured-nation (MFN) barriers on non-members.
 The best known free trade agreements are the European Free Trade
Association (EFTA), the North American Free Trade Agreement (NAFTA), and
the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA)
 Customs Union (CU): -A CU moves beyond an FTA by establishing a common
external tariff (CET) on imports from non-member countries
 Some examples of Customs Unions include South African Customs Union
(SACU), East African Community Customs Union (EAC), Gulf Cooperation
Council (GCC), and Central American Customs Union (CACU).
European Union (EU)

• The EU is India's third largest trading partner, accounting for €88 billion worth of trade in
goods in 2021 or 10.8% of total Indian trade, after the USA (11.6%) and China (11.4%).
• The EU is the second-largest destination for Indian exports (14.9% of the total) after the
USA (18.1%), while China only ranks fourth (5.8%).
• India is the EU’s 10th largest trading partner, accounting for 2.1% of EU total trade in
goods in 2021, well behind China (16.2%), the USA (14.7%) or the UK (10%).
• Trade in goods between the EU and India increased by about 30% in the last decade.
• Trade in services between the EU and India reached €30.4 billion in 2020.
• The EU's share in foreign investment stock in India reached €87.3 billion in 2020, up
from €63.7 billion in 2017, making the EU a leading foreign investor in India. This is
significant but way below EU foreign investment stocks in China (€201.2 billion) or
Brazil (€263.4 billion).
• Some 6,000 European companies are present in India, providing directly 1.7 million jobs
and indirectly 5 million jobs in a broad range of sectors.
India’s Regional Trade Agreements

 India currently has 13 Free Trade Agreements (FTAs)/Regional

Trade Agreements (RTAs) with other countries/regions. In addition,
it has 6 limited coverage Preferential Trade Agreements (PTAs)
 India-Sri Lanka Free Trade Agreement (FTA)
 Agreement on South Asian Free Trade Area (SAFTA)
 India-Nepal Treaty of Trade
 India-Bhutan Agreement on Trade, Commerce and Transit
 India-Thailand FTA - Early Harvest Scheme (EHS)
 India-Singapore Comprehensive Economic Cooperation Agreement
(CECA)
 India-ASEANFTA
 India-South Korea Comprehensive Economic Partnership
Agreement (CEPA)
 India-Japan CEPA
 India-Malaysia CECA
 India-Mauritius Comprehensive Economic Cooperation and
Partnership Agreement (CECPA)
 India- Australia
Preferential Trade Agreements (PTAs)

 Asia Pacific Trade Agreement (APTA)

 Global System of Trade Preferences (GSTP
 SAARC Preferential Trading Agreement (SAPTA)
 India-Afghanistan PTA
 India – MERCOSUR PTA
 India – Chile PTA
Rationales invoked for treating the Regional Trade
Agreements as a special case

 They create a wider trading area;

 They make possible a more economic allocation of resources; and
 They increase production and raise planes of living.
https://economictimes.indiatimes.com/blogs/et-commentary/indias-trade-with-its-fta-partners-experiences-challenges-and-way-forward/
“
Thank You

DR. POOJA KHANNA

”