promote and grow international trade, India adopted a policy of forming
Regional Trade Agreements. They were assumed as ‘building blocks’ towards
liberalization of trade.  The various
levels of agreements are FTA – Free Trade Agreement, PTA- Preferential Trade
Agreements, and CECA – Comprehensive Economic Cooperation Agreements etc. The
first bilateral FTA was with Sri Lanka – the India-Sri Lanka Free Trade
Agreement (ISLFTA) on March 2000. Along with many trade agreements with South
East Asian countries, India is examining the potential for cooperation in trade
in goods and services, investments and other areas of economic cooperation with
a number of Asian countries such as China and Indonesia. Along with ‘Looking
East’ policy, India has seriously begun efforts to develop preferential trade
linkages with developing countries in Latin America (MERCOSUR, Chile), West
Asia (Gulf Cooperation Council (GCC), Israel) and Africa (South African Customs
Union (SACU), Mauritius).

Below are some major bilateral
co-operations India has entered into;

– India Free Trade Area (AIFTA):

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relationship with ASEAN is a key pillar of our foreign policy. AIFTA is a free
trade area with 10 members of ASEAN and India which came into effect on 1st Jan
2010.This has been growing steadily with ASEAN being India’s fourth largest
trading partner. India’s export to ASEAN has increased to US$ 31.07 billion in
2016-17 and India’s import to ASEAN increased by 1.8% in 2016-17 stood at US$
40.63 billion.


Sri Lanka – India-Sri Lanka Free Trade Agreement (ISFTA):

ISFTA came active on 1st March 2000,
provides duty free concessions to a wide range of products traded between the 2
countries. India has now emerged as the largest and the most balanced trading
partner of Sri Lanka. In 2012, imports from India stood at 19% of the overall
imports of Sri Lanka, which was the largest source of imports to Sri Lanka. Sri
Lanka’s exports to India stood at 5.8% of overall exports of Sri Lanka ,3rd
largest destination, with total trade between the two countries at US$ 4.2
billion. The ISFTA has made a significant contribution in bringing this situation
with over 70% of Sri Lankan exports to India moving under the FTA and below 30%
of the Indian exports to Sri Lanka moving under the FTA. At a time when Sri
Lanka’s traditional markets in the West are showing slow recovery from the
global economic crisis, the growing markets in Asia like that of India provide
a great opportunity for Sri Lankan exports via the ISFTA.


– Bay of Bengal Initiative for Multi-Sectoral Technical and Economic

International Organizations of Bangladesh,
India, Sri Lanka, Myanmar, Thailand, Bhutan and Nepal. Agreements are under negotiations.


Thailand (separate
from FTA agreement with ASEAN):

EHS (Early Harvest Scheme) is between India and
Thailand signed in October 2003, wherein 83 products were identified to be
reduced to zero in a phased manner. EHS is used as way to build greater
confidence amongst trading partners to prepare them for bigger economic


– South Asia Free Trade Agreement:

Free Trade Agreement among India, Pakistan, Nepal, Sri Lanka, Bangladesh,
Bhutan and the Maldives searched on 6 January 2004 at the 12th SAARC summit in
Islamabad, Pakistan. The member countries India, Pakistan and Sri Lanka shall
bring down duties to 20% in first phase ended on 2007 and to zero by 2012.Other
nations Nepal, Bhutan, Bangladesh, Afghanistan and Maldives have an additional
3 years to reduce tariffs to zero.


Schemes to Boost Export/Foreign Trade:

Exports are an important driver of economic growth and
help create much needed jobs along with improving balance of trade in our favor.
India need to work on logistics, labor laws, trade policies etc. to increase
competitiveness in International trade. To mitigate the adverse impact of
global recession and boost exports in general, the government has always
adopted positive policy measures, a few of them listed below:

Pre Export Schemes:

1.      Advance
Authorization Scheme – Allows duty free imports of Inputs along with fuel, oil,
catalyst etc required for manufacturing export product. Available for physical
exports and deemed exports including intermediate supplies.

2.      Duty
Free Import Authorization (DFIA) – Active from May, 2006. To facilitate
transfer of the authorization or the inputs. Minimum VA of 20% is required
under this scheme.

3.      Schemes
for Gems & Jewellery Sector – An employment oriented sector. Duty free
import/procurement from nominated agencies allowed in advance.

Export Schemes:

1.      Duty
Entitlement Pass Book (DEPB) Scheme – Neutralizes custom duty on all inputs for
a product.

Duty Drawback Scheme –
Refund of customs duty and excise duty on the inputs used in the manufacture of
goods to be exported. Under GST, the duty drawback would only be available for
the customs duty paid on imported inputs or central excise paid on certain
petroleum or tobacco products used as inputs or fuel for captive power






For employment generation
in rural and semi urban areas, the Yojana has been expanded to include
agriculture produce and their value added products. Duty credit scrip benefits
are guaranteed.



Exporters of all products
to notified countries shall be entitled for Duty Credit Scrip equivalent to 3%
of FOB value of exports. The scheme covers a total of 110 markets.



Export of notified products to shall be entitled
for Duty Credit Scrip equivalent to 2% of FOB value of exports. This is to incentivize
export of products which have high employment potential

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