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35 Frequently Asked Questions (FAQs) covering Free Trade Agreements (FTAs), Comprehensive Economic Partnership Agreements (CEPA), Comprehensive Economic Cooperation Agreements (CECA), Early Harvest Schemes (EHS), and Preferential Trade Agreements (PTA) — specifically in the context of India.
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....5 Frequently Asked Questions (FAQs) covering Free Trade Agreements (FTAs), Comprehensive Economic Partnership Agreements (CEPA), Comprehensive Economic Cooperation Agreements (CECA), Early Harvest Schemes (EHS), and Preferential Trade Agreements (PTA) — specifically in the context of India.<br>By: - YAGAY andSUN<br>Customs - Import - Export - SEZ<br>Dated:- 13-5-2025<br>🧾 General FAQs on Trade Agreements 1. What is a Free Trade Agreement (FTA)? An FTA is an agreement between two or more countries to reduce or eliminate trade barriers (like tariffs and quotas) on goods and services traded between them. 2. How is an FTA different from other trade arrangements? FTAs are more comprehensive than PTAs (which offer limited tariff con....
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....cessions), but less comprehensive than CEPA/CECA, which often include services, investment, and regulatory cooperation. 3. What is a Comprehensive Economic Partnership Agreement (CEPA)? CEPA is a type of FTA that includes not just trade in goods but also services, investments, IPR, dispute settlement, and other areas. 4. What is a Comprehensive Economic Cooperation Agreement (CECA)? CECA is similar to CEPA but may differ in scope; both are broader than traditional FTAs and reflect strategic economic cooperation between countries. 5. What is a Preferential Trade Agreement (PTA)? A PTA involves countries offering preferential tariff rates (not zero) on select goods, usually limited in scope. India-Specific Trade Agreements 6. Which co....
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....untries has India signed FTAs with? India has FTAs with ASEAN, Japan, South Korea, Sri Lanka, Nepal, Bhutan, and several others. 7. What is the India-UAE CEPA? Signed in 2022, the India-UAE CEPA is a full-fledged trade agreement covering goods, services, investment, and digital trade. 8. What is the India-Australia ECTA? The Economic Cooperation and Trade Agreement (ECTA) between India and Australia is a step toward a full CEPA and reduces tariffs on many goods and services. 9. What is the status of India's FTA with the UK? India and the UK are in advanced negotiations for a bilateral FTA expected to cover goods, services, labor mobility, and investment. 10. Why did India withdraw from RCEP? India exited RCEP in 2019 due to concern....
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....s over trade imbalances, especially with China, and inadequate safeguards for domestic industries. ⚖️ Strategic and Economic Rationale 11. Why does India enter into trade agreements? To enhance market access, attract investment, integrate into global supply chains, and support economic diplomacy. 12. How do FTAs affect Indian exporters? FTAs provide tariff-free or lower-tariff access to foreign markets, improving competitiveness. 13. Do FTAs benefit Indian consumers? Yes, by enabling access to better-quality and lower-priced imported goods. 14. Which sectors benefit the most from Indian FTAs? Textiles, pharmaceuticals, IT services, and agriculture often benefit, depending on the partner country. 15. What are the risks....
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.... of FTAs to Indian industries? Cheaper imports may hurt vulnerable domestic sectors like dairy, electronics, and MSMEs. 📃 About Early Harvest Schemes (EHS) 16. What is an Early Harvest Scheme? An EHS is a preliminary trade agreement that reduces tariffs on select goods while a broader FTA is being negotiated. 17. How does EHS help India? EHS allows early benefits in sensitive sectors and builds momentum for full-fledged FTAs. 18. Has India used EHS in the past? Yes, India used EHS with Thailand and Singapore before broader agreements were signed. 🧩 Structure and Legal Aspects 19. What are Rules of Origin in FTAs? These are criteria to determine the national source of a product to ensure only goods from FTA members....
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.... get preferential treatment. 20. Are FTAs legally binding? Yes, FTAs are international treaties and carry legal obligations once ratified. 21. Who negotiates FTAs on behalf of India? The Ministry of Commerce and Industry, supported by other departments and stakeholders. 22. How are FTAs ratified in India? They are signed by the central government and may require legislative changes for implementation. 📉 Utilization and Impact 23. What is FTA utilization rate? It refers to the percentage of eligible exports that actually use the preferential benefits under FTAs. 24. Why is FTA utilization low in India? Lack of awareness, complex documentation, and stringent rules of origin. 25. How do FTAs impact India's trade deficit? W....
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....hile FTAs aim to boost exports, India has sometimes experienced rising deficits with FTA partners (e.g., ASEAN, South Korea). 🌍 Comparisons and Trends 26. How are CEPA and CECA different? There is no universally fixed distinction-India uses CEPA for broader agreements; CECA may be slightly narrower but both cover trade, services, and investment. 27. How does India's FTA approach compare with China's? India is cautious and defensive, while China has aggressively pursued FTAs (e.g., RCEP, CAFTA). 28. Is India planning new FTAs? Yes, ongoing negotiations include the UK, EU, Canada, and GCC countries. 📦 Goods and Services Coverage 29. What types of goods are usually included in FTAs? Agricultural products, industrial g....
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....oods, and raw materials with varying degrees of sensitivity. 30. Are services included in all Indian FTAs? Not always. CEPA/CECA typically include services, but many older FTAs focus primarily on goods. 🧮 Investment and Other Provisions 31. Do Indian FTAs cover investment? Yes, many recent FTAs/CEPAs include investment facilitation, protection, and dispute resolution. 32. How do FTAs handle disputes? Most FTAs include bilateral dispute settlement mechanisms, separate from WTO processes. 📢 Public and Industry Involvement 33. Are Indian businesses consulted during FTA negotiations? Yes, industry associations, export councils, and chambers of commerce are typically involved in pre-negotiation consultations. 34. Can I....
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....ndian citizens or MSMEs directly benefit from FTAs? Yes, especially exporters and importers, provided they meet compliance and documentation requirements. 35. Where can one access the text of India's FTAs? Official FTA texts are available on the Ministry of Commerce and Industry's website and respective trade partner websites. ***<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....