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



Parliament approves the free trade agreement with India
The Swiss parliament has approved the free trade agreement between the EFTA states and India. After the Council of States, the National Council also approved the corresponding federal decree on Thursday. Switzerland is one of the EFTA states.
India Mercosur can explore signing bilateral pacts Piyush Goyal
Commerce Minister Piyush Goyal proposed that India and the Mercosur trade bloc, comprising Argentina, Brazil, Paraguay, and Uruguay, explore the possibility of signing bilateral free-trade agreements (FTAs) due to stalled efforts in expanding their existing Preferential Trade Agreement (PTA).
New Zealand PM Luxon looks to sign FTA pact with India in 60 days
New Zealand’s Prime Minister Christopher Luxon aims to finalize a free trade agreement with India within 60 days, targeting a tenfold increase in bilateral trade over the next decade. While both nations express strong optimism and highlight complementary economies, sensitive agricultural products like dairy pose potential challenges.
India and New Zealand to begin talks on FTA after a decade, announces PM Modi
India and New Zealand will resume talks for a proposed Free Trade Agreement (FTA), Prime Minister Narendra Modi announced on Monday. The FTA negotiations had stalled in 2015 due to disagreements over sensitive areas like dairy and agriculture.
India to revamp bilateral investment treaty framework: CEA
India is revising its Bilateral Investment Treaty (BIT) framework aims to address investor concerns about stringent dispute resolution and limited protections, aligning with evolving global economic realities and ensuring India’s sovereign rights and regulatory space.
India-UK FTA: Focus on tariff reductions, social security agreement
After duty cut on bourbon, motorcycles, expectation that India may give similar relaxation to scotch whisky and automobiles.
India-Israel free trade deal on the cards: What it means for both nations
As both nations move towards signing the FTA, the partnership is expected to open new trade and investment opportunities, benefiting businesses and economies on both sides.
India negotiating FTA with GCC and Qatar: MEA
India is in the process of negotiating a Free Trade Agreement with the Gulf Cooperation Council and is also considering an FTA with Qatar.
Qatar ready to fast-track investment promotion, protection deal with India
Qatar said it is ready to take steps to speed up the negotiations for a new bilateral investment promotion and protection agreement with India.
Need standalone bilateral investment treaties independent of FTAs: FM
India Finance Minister Nirmala Sitharaman on Saturday emphasised the need for Bilateral Investment Treaties (BITs) to be negotiated as standalone agreements rather than being included as a chapter in Free Trade Agreements (FTAs).