bilaterals.org logo
bilaterals.org logo

India

The Indian government has been active in seeking out bilateral trade agreements, with other so-called developing countries and the developed world as well.

India has signed limited FTAs with Sri Lanka (1998) and Thailand (2003) plus a number of preferential trade agreements (tariff concession schemes) with countries/blocs such as Afghanistan, Nepal, Chile and Mercosur.

India is also part of SAFTA (the South Asia FTA), BIMSTEC (aiming to develop an FTA), the Asia-Pacific Trade Agreement (a preferential trade agreement with Bangladesh, China, Laos, South Korea and Sri Lanka) and IBSA (the India-Brazil-South Africa triangle aiming to develop a trilateral South-South FTA).

At the end of June 2005, the government signed a Comprehensive Economic Cooperation Agreement with Singapore, what many consider India’s first "comprehensive" FTA. India also signed FTAs with ASEAN (2009), Korea (2009) and Japan (2010), which were later criticised for widening India’s trade deficit with the three trade partners. These deals were followed by another one signed with Malaysia (2011). India expects to upgrade its pact with Sri Lanka into a similar type of Comprehensive Economic Partnership Agreement.

In 2007-2008, India commenced FTA talks with European powerhouses EFTA (European Free Trade Area) and the EU (European Union), but in 2013 talks stalled with the Union, over issues such as market access given by India to automobiles and alcohol from the EU, and Delhi’s refusal to open up its public procurement and financial services sector like banking, insurance and e-commerce.

In 2010, it began talks with New Zealand and in 2011 with Australia, but they were put on hold in 2013 when India started negotiating the mega-regional RCEP (Regional Comprehensive Economic Partnership) agreement with the 10 ASEAN nations, Australia, China, Japan, New Zealand and South Korea. In November 2019, India pulled out of the RCEP negotiations, due to concerns over trade deficits, notably with China, and countries’ reluctance to open markets to Indian services and investments. RCEP has generated a lot of controversy and resistance at home, mostly from farmers, unions, dairy cooperatives and patients’ groups that were concerned about the impacts on medicines.

India dropping out of RCEP has led the country to renew its interest in bilateral talks. The Australia and New Zealand FTAs are in the process of being revived. India is looking into ways to restart negotiations with the EU and speed up those with EFTA. An India-US FTA has been on the table as well, which has angered farmers and unions at home because it would hurt local agriculture.

Apart from these deals, bilateral trade negotiations are going on with Bangladesh, Canada, Colombia, the GCC (Gulf Cooperation Council), Iran, Israel, the Russia-led Eurasia Economic Union, Uruguay, Venezuela, and Mauritius, the last of which would provide a foothold into Africa through the African Continental Free Trade Area. Further down the line, the government is in various stages of considering talks with Cambodia, China, Costa Rica, Egypt, Hong Kong, Indonesia, Korea, the Philippines, SACU (Southern African Customs Union) and the United Kingdom.

India has also signed 86 bilateral investment treaties (BITs) with a wide array of countries, even though only 13 of them are still in force. Following a few controversial investor-state disputes (ISDS), India terminated most of its BITs and released a revised model BIT in December 2015, which was to serve as a basis for future negotiations and should replace existing treaties. This new model tries to achieve more balance by, for instance, requiring investors to use local courts before turning to international arbitration and leaving out the highly contested provision on “fair and equitable treatment”. However, it is not clear how much the government is using it as a red line, rather than a starting point for negotiations.

See also: The Government of India’s trade agreement portal

last update: October 2020
Photo: Rico Gustav/CC BY 2.0



US not looking for free trade agreement: Piyush Goyal in CA
India and the US are ready to be more engaged in the Indo-Pacific economic framework, which will help create more resilient supply chains and partnerships between businesses in the two countries.
Discussions on India-Bangladesh Economic Partnership Agreement to begin soon: Modi
India and Bangladesh will soon begin discussions on a bilateral economic partnership agreement, Prime Minister Narendra Modi said on 6 September 2022.
‘FTAs with UK, Canada to be sealed in 2022’
India’s free trade pact negotiations with the United Kingdom are ‘within touching distance’ of a deal and a similar deal along with a bilateral investment treaty with Canada is expected to be concluded by December, its top trade official said.
Trade agreement: Why India made a U-turn on free trade deals
Increased collaboration between countries like India, Australia, Japan and the US reflect their growing anxiety over China’s control over supply chains and its ability to disrupt them.
Australia may ratify interim trade deal with India by Nov 18
Australia will likely ratify before November 18 an interim trade deal with India, which was signed on April 2 but is yet to come into force due to a delay in endorsement by its Parliament following the election of a new labour govenrment there.
FTA provisions to prevail in rules of origin disputes
India will follow provisions of free trade agreements (FTAs) over the wider and more stringent domestic framework in case of any dispute over value addition or rules of origin related to imports under FTAs.
PM okays major trade deal negotiations with India
Prime Minister Sheikh Hasina has given her seal of approval to a proposal to begin formal negotiations towards signing the CEPA with India, according to sources in the know about the development.
India, UK working intensively to meet Diwali deadline for FTA
India and the UK will continue to work intensively to meet the Diwali deadline at the end of October for a Free Trade Agreement (FTA) announced during the India visit of outgoing British Prime Minister Boris Johnson, a U.K. government statement said.
Switzerland keen on closing free trade agreement talks with India
Switzerland advocated for the quick completion of negotiations regarding the free trade agreement between the EFTA and India in a recent meeting held between Swiss federal councillor Ueli Maurer and Indian finance minister Nirmala Sitharaman in New Delhi.
Rushed FTA between UK and India may pose big health threat
A newly published report has outlined several recommendations for a safe trade deal with India, which it says if rushed could threatened UK pesticide standards and farming.