India views Regional Trading Arrangements (RTA's) as 'building blocks' towards the overall objective of trade liberalisation. Hence, it is participating in a number of RTA's which include Free Trade Agreements (FTA's); Preferential Trade Agreements (PTA's); Comprehensive Economic Cooperation Agreements (CECA's); etc. These agreements are entered into either bilaterally or in a regional grouping. Some of the major one's are:-
Agreement on South Asia Free Trade Area (SAFTA)
The Agreement on South Asian Free Trade Area (SAFTA) was signed by all the member States of the South Asian Association for Regional Cooperation (SAARC) during the twelfth 'SAARC Summit' held in Islamabad on 4-6th January, 2004. As a result, SAFTA came into force from 1st January, 2006.
SAARC was established in Dhaka on December 7-8, 1985 with the objectives of:- promoting the welfare of people of South Asia; accelerating economic growth and social progress; promoting active collaboration in economic growth and social progress; promoting active collaboration in the economic, social, cultural, technical and scientific fields; strengthening cooperation in international forums on matters of common interest; and cooperating with international and regional organizations with similar aims and purposes. Its members include Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
The objectives of SAFTA are to promote and enhance mutual trade and economic cooperation among the 'Contracting States' by inter-alia:-
- Eliminating barriers to trade in, and facilitating the cross-border movement of goods between the territories of the Contracting States;
- Promoting conditions of fair competition in the free trade area, and ensuring equitable benefits to all Contracting States, taking into account their respective levels and pattern of economic development;
- Creating effective mechanism for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and
- Establishing a framework for further regional cooperation to expand and enhance the mutual benefits of this Agreement.
According to the agreement, SAFTA will be implemented through the following instruments:-
Asia-Pacific Trade Agreement (APTA)
- Trade Liberalisation Programme
- Rules of Origin
- Institutional Arrangements
- Consultations and Dispute Settlement Procedures
- Safeguard Measures
- Any other instrument that may be agreed upon
The Asia-Pacific Trade Agreement (APTA), formerly known as the Bangkok Agreement, was signed on 31st of July 1975 as an initiative of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) is the regional development arm of the United Nations for the Asia-Pacific region. It focuses on issues that are most effectively addressed through regional cooperation and include:-
- The issues that all or a group of countries in the region face, for which it is necessary to learn from each other;
- The issues that benefit from regional or multi-country involvement;
- The issues that are transboundary in nature, or that would benefit from collaborative inter-country approaches;
- The issues that are of a sensitive or emerging nature and require further advocacy and negotiation.
APTA/ Bangkok agreement is the 'First Agreement' on trade negotiations among the developing member countries of ESCAP. It is a preferential tariff arrangement that aims at promoting intra-regional trade through exchange of mutually agreed concessions by the members (developing country) of the ESCAP region. The Bangkok Agreement is essentially a preferential trading arrangement designed to liberalize and expand trade progressively in the ESCAP region through such measures as the relaxation of tariff and non-tariff barriers and trade-related economic cooperation.The developing countries and associate members of ESCAP are eligible to accede to the Agreement.
The original signatories to the Agreement were Bangladesh, India, Lao People’s Democratic Republic, the Republic of Korea and Sri Lanka. Lao PDR has not issued customs notification on the tariff concessions granted, and hence to this extent, is not an effective participating member. China's accession to the Agreement was accepted at the Sixteenth Session of the Standing Committee of the Bangkok Agreement in April 2000.
The objectives of the agreement is to promote economic development through a continuous process of trade expansion among the developing member countries of ESCAP and to further international economic cooperation through the adoption of mutually beneficial trade liberalization measures consistent with their respective present and future development and trade needs, and taking into account the trading interest of third countries, particularly those of other developing counties.
The agreement is governed in accordance with the following general principles:-
BIMSTEC ( Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation)
- The Agreement shall be based on overall reciprocity and mutuality of advantages in such a way as to benefit equitably all participating States;
- The principles of Transparency, National Treatment and Most-Favoured-Nation Treatment shall apply to the trade relations among the Participating States;
- The special needs of least developed country Participating States shall be clearly recognized and concrete preferential measures in their favour shall be agreed upon.
BIMSTEC (Bangladesh India Myanmar Sri Lanka and Thailand Technical and Economic Cooperation), a sub-regional economic cooperation grouping was formed in Bangkok in June 1997. Myanmar joined the grouping later in December 1997. Bhutan and Nepal too joined in February 2004. Its membership involves 5 members of SAARC (India, Bangladesh , Bhutan, Nepal & Sri Lanka) and 2 members of ASEAN (Thailand, Myanmar). Thus, it is visualized as a ‘bridging link' between the two major regional groupings i.e. ASEAN and SAARC. Its chairmanship of BIMSTEC rotates among the member countries in alphabetical order. The immediate priority of the grouping is consolidation of its activities and making it attractive for economic cooperation.
At its first summit held in Bangkok on July 31, 2004, the acronym BIMSTEC was renamed as “Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation.”
Initially, cooperation were proposed into 6 sectors. But, during the 11th Senior Official Meeting in New Delhi in August 2006, it was agreed that the areas of cooperation should be expanded to 13 sectors and each sector will be led by members in a voluntary manner. These include:-
- Trade & Investment (Bangladesh);
- Technology (Sri Lanka);
- Energy (Myanmar);
- Transport & Communication (India);
- Tourism (India);
- Fisheries (Thailand);
- Agriculture (Myanmar);
- Cultural Co-operation (Bhutan);
- Environment and Disaster Management (India);
- Public Health (Thailand);
- People-to-People Contact (Thailand);
- Poverty Alleviation (Nepal);
- Counter-Terrorism and Transnational Crimes (India);
BIMSTEC member countries agreed to establish the BIMSTEC Free Trade Area Framework Agreement in order to stimulate trade and investment in the parties, and attract outsiders to trade with and invest in BIMSTEC at a higher level. The Framework Agreement on the BIMST-EC FTA was signed on 8th February, 2004 in Phuket, Thailand. The Framework Agreement includes provisions for negotiations on FTA in goods, services and investment. A Trade Negotiating Committee (TNC) has been constituted to carry forward the programme of negotiations. The TNC had its 1st Meeting in Bangkok on 7-8 September 2004. TNC's negotiation area covers trade in goods and services, investment, economic cooperation, as well as trade facilitations and also technical assistance for LDCs in BIMSTEC. It was agreed that once negotiation on trade in goods is completed, the TNC would then proceed with negotiation on trade in services and investment.
Framework Agreement on Comprehensive Economic Cooperation between India and the Association of South East Asian Nations
India's engagement with the Association of South East Asian Nations (ASEAN) started with its "Look East Policy" in the year 1991. India’s focus on a strengthened and multi-faceted relationship with it is an outcome of ASEAN’s economic, political and strategic importance in the larger Asia-Pacific Region and its potential to become a major partner of India in trade and investment. Also, it now provides a land bridge for India to connect with the Asia-Pacific-centred economic crosscurrents shaping the 21st century market place. While, ASEAN seeks access to India’s professional and technical strengths. India and ASEAN have convergence in their security perspectives.
ASEAN was established on 8 August 1967 in Bangkok by the five original member countries, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand. Now, it has a membership of 10 countries namely Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. India is one of the four 'Summit level Dialogue Partners' of ASEAN.
A Framework Agreement on Comprehensive Economic Cooperation between ASEAN and India was signed on 8 th October 2003 in Bali (Indonesia). The key elements of the agreement cover:- FTA in Goods, Services and Investment, as well as Areas of Economic Cooperation. The Agreement also provided for an Early Harvest Programme (EHP) which covers areas of Economic Cooperation and a common list of items for exchange of tariff concessions as a confidence building measure.
The objectives of this Agreement are :-
- Strengthen and enhance economic, trade and investment co-operation between the Parties;
- Progressively liberalise and promote trade in goods and services as well as create a transparent, liberal and facilitative investment regime;
- Explore new areas and develop appropriate measures for closer economic co-operation between the Parties; and
- Facilitate the more effective economic integration of the new ASEAN Member States and bridge the development gap among the Parties.
The areas of economic cooperation are:-
India-Mercosur Preferential Trade Agreement (PTA)
- Where appropriate, the Parties agree to strengthen their cooperation in the following areas, including, but not limited to:-
- Trade Facilitation
- Mutual Recognition Arrangements, conformity assessment, accreditation procedures, and standards and technical regulations;
- Non-tariff measures;
- Customs cooperation;
- Trade financing; and
- Business visa and travel facilitation.
- Sectors of Cooperation
- Agriculture, fisheries and forestry;
- Services:- media and entertainment, health, financial, tourism, construction, business process outsourcing, environmental;
- Mining and energy:- oil and natural gas, power generation and supply;
- Science and technology:- information and communications technology, electronic-commerce, biotechnology;
- Transport and infrastructure:- transport and communication;
- Manufacturing:- automotive, drugs and pharmaceuticals, textiles, petrochemicals, garments, food processing, leather goods, light engineering goods, gems and jewellery processing;
- Human resource development:- capacity building, education, technology transfer; and
- Others:- handicrafts, small and medium enterprises, competition policy, Mekong Basin Development, intellectual property rights, government procurement.
- Trade and Investment Promotion
- Fairs and exhibitions;
- ASEAN-India weblinks; and
- Business sector dialogues.
- The Parties agree to implement capacity building programmes and technical assistance, particularly for the New ASEAN Member States, in order to adjust their economic structure and expand their trade and investment with India.
- Parties may establish other bodies as may be necessary to coordinate and implement any economic cooperation activities undertaken pursuant to this Agreement.
A Framework Agreement was signed between India and MERCOSUR on 17 th June 2003 . The aim of this Framework Agreement is to create conditions and mechanisms for negotiations in the first stage, by granting reciprocal tariff preferences and in the second stage, to negotiate a free trade area between the two parties in conformity with the rules of the World Trade Organization. As a follow up to the Framework Agreement, a Preferential Trade Agreement (PTA) was signed in New Delhi on January 25, 2004. The aim of this Preferential Trade Agreement is to expand and strengthen the existing relations between MERCOSUR and India and promote the expansion of trade by granting reciprocal fixed tariff preferences with the ultimate objective of creating a free trade area between the parties.
MERCOSUR is a trading bloc in Latin America formed in 1991 and comprising Brazil, Argentina, Uruguay and Paraguay. It was formed with the objective of facilitating the free movement of goods, services, capital and people among the four member countries. It is the fourth largest integrated market after the European Union (EU), North American Free Trade Agreement (NAFTA) and ASEAN.
Other agreements include:-