Preferential Trade Agreements (PTAs) are one of the important tools in international trade, aimed at enhancing trade flows between countries. These agreements are usually bilateral or regional in nature, and they offer preferential treatment to member countries in the form of reduced tariffs or other trade barriers. In this article, we will discuss the Preferential Trade Agreement between India and its trading partners, and how it impacts the Indian economy.
India has signed several PTAs with other countries and regional groupings, including ASEAN, Japan, South Korea, and Mercosur. These agreements have helped India to increase its trade with these countries by removing or reducing trade barriers. As a result, India`s exports have increased, and the country has become an important player in the global trade arena.
One of the most significant PTAs that India has signed is with the Association of Southeast Asian Nations (ASEAN). The India-ASEAN PTA came into effect in 2010, and it covers trade in goods, services, and investment. Under the agreement, both India and ASEAN have agreed to reduce tariffs on about 80% of traded goods over a period of time. This has led to an increase in bilateral trade between India and ASEAN, which is expected to reach $200 billion by 2025.
Another important PTA that India has signed is with Japan. The India-Japan Comprehensive Economic Partnership Agreement (CEPA) came into effect in 2011, and it covers trade in goods, services, and investment. The agreement has helped to boost bilateral trade between India and Japan, which has grown from $15 billion in 2010 to $21 billion in 2019. Japan is now one of India`s top trading partners, and the CEPA has facilitated greater economic integration between the two countries.
The India-South Korea PTA is another important agreement that has helped to boost bilateral trade between the two countries. The agreement came into effect in 2010 and covers trade in goods, services, and investment. The PTA has led to an increase in bilateral trade between India and South Korea, which has grown from $17 billion in 2010 to $21 billion in 2019. South Korea is now one of India`s top trading partners, and the PTA has helped to deepen economic ties between the two countries.
In conclusion, Preferential Trade Agreements have played a significant role in boosting India`s trade with its trading partners. By removing or reducing trade barriers, these agreements have helped to increase India`s exports and have made it a more attractive destination for foreign investment. In the coming years, we can expect India to continue to sign new PTAs with other countries and regional groupings, as it seeks to further expand its trade and investment opportunities.
