Introduction

FTAs are trade agreements between two countries which aim to give each other access to
markets by lowering or removing border protection measures such as border taxes on exports and
imports, and other barriers (such as standards, processes). FTAs covers trade in services (such as
construction, banking, trading etc) and trade in goods (such as industrial products or agricultural)
or FTAs can also cover other areas such as investment, intellectual property rights (IPRs), and
government procurement and competition policy. Free Trade Agreements (FTAs) aim to remove
the barriers to trade and investment so that trade can grow as a result of specialization, division
of labor, and most importantly via comparative advantage. Unlike a customs union, members of
a free trade area do not have a common external tariff, to avoid evasion (through re-exportation)
the countries use the system of certification of origin called as rules of origin, where there is a
requirement for the minimum extent of local material inputs and local transformations adding
value to the goods.

When no artificial barriers put in place by governments to restrict the flow of goods and services
between trading nations then free flow occurs. When trade barriers, such as tariffs and subsidies
are put in place, they protect domestic producers from international competition and redirect,
rather than create trade flows. FTAs are important so as remove the barriers to trade and
investment so that trade can grow and help in increase production, production efficiencies ,
benefits to consumers, foreign exchange gains, employment and for economic growth.

India Trade agreement with other individual nations like Japan, Sri Lanka,
Malaysia, Korea and Singapore.

a) India trade with Japan

India has trade collaboration with Japan which is known as Comprehensive Economic
Partnership Agreement between India and Japan (CEPA). The main purpose of the agreement
was like for the liberalization and the facilitation in case of goods and services, for the increase
in opportunities and for the strengthening the protection in case of investment activities in

1
parties. The trade was also formed for the protection of intellectual property rights and for the
promotion and cooperation in that field. 1

The agreement was signed between Republic of India and Japan on 25th October 2010. The
Indian prime minister Dr Manmohan Singh and the Japan Prime minister Mr Naoto Kan signed
the meeting in Tokyo, whereby the discussed the importance of close and broad economic
partnership between India and Japan.2

In 2011,the bilateral trade touched US dollar 18.32 billion in the fiscal year 2011-12 as compared
to US dollar 13.72 billion in 2010-11. However, after two consecutive years of touching new
heights, the bilateral trade has decelerated. After touching US dollar 18.51 billion in fiscal year
2012-13, bilateral trade between India and Japan came down to US dollar 16.29 billion in fiscal
year 2013-14. It slid further down to US dollar 15.51 billion in fiscal year 2014-15.3

The Comprehensive Economic Partnership Agreement (CEPA) has helped strengthen the
economic ties between India and Japan, as it was conveyed by Tamaki Tsukada, Minister of
Economy at the Embassy of Japan. As it was conveyed by him that fund flow between the
Japanese companies into India will result to an positive impact for being jobs created here ,
which had offset India negative trade impact. He also said that the companies such as Panasonic,
Yamaha and Hitachi are keen for looking India as an export platform. However, there is an work
to be done by the both government as for reducing the taxation, intellectual property rights and
standardization in control of control.4

FDI has increased in the past years. Firms recognize that their costs were too high and items
misled and are attempting efforts to narrow the gap with their Korean rivals. As Japanese firms

1
Comprehensive Economic Partnership Agreement between India and Japan (CEPA), “Article1- Objective”,
Retrieved from http://commerce.nic.in/trade/ijcepa_basic_agreement.pdf, on, September 15, 2018.
2
Press information Bureau , Government of India , Prime Minister’s office, “ Joint declaration between the leaders
of the Republic of India and Japan on the conclusion of the Comprehensive Economic Partnership Agreement
between the Republic of India and Japan”, Retrieved from
http://pib.nic.in/newsite/PrintRelease.aspx?relid=66563, on, September 15, 2018.
3
Dr Shamshad A Khan, “India – Japan Economic and Trade partnership: Suggestions to make it Balanced and
Mutually Beneficial”, Retrieved from
http://downloadpdfebook.herokuapp.com/?s=OMPREHENSIVE+ECONOMIC+PARTNERSHIP+AGREEMENT++++BET
WEEN+THE+REPUBLIC+OF+INDIA+AND+JAPAN+, on, September 15, 2018.
4
CEPA has helped strengthen Indo- Japan economic ties, Retrieved from
http://www.thehindubusinessline.com/economy/cepa-has-helped-strengthen-indojapan-economic-
ties/article4784473.ece, on, September 15, 2018.

2
gradually gain market share, they too are able to exploit their production assets such as an
emphasis on quality and efficiency. Indo–Japanese monetary relations, having entered a new
stage in their development are likely to further progress in the future.

b) India and Sri Lanka

India and Sri Lanka have entered into an trade agreement namely Free Trade agreement between
the Republic of India and the Democratic Socialist Republic of Sri Lanka (FTA). The purpose of
the trade agreement was for promotion of trade in harmonious development in case of economic
relations between India and Sri Lanka, for the purpose of the implementation of the principle of
reprocity. Also, for the removal of trade barriers, and for the harmonious development and for
the expansion of world trade. 5

The Indo-Sri Lankan Free Trade Agreement (ISFTA) was signed on 28 th December 1998; it
came into effect from 1st March 2000. Sri Lanka has got fully duty free access to Indian market
under IFSTA at the end of March 2003. The entrepreneurs in Sri Lanka can export now moiré
than 4000 product lines to Indian Market on duty free basis.6

As per the diagram as shown below there is a significant rise in the trade as shown. From the
year 2000 – 2013, there has been a rise in trade 9 % to 23 %. The export to India in the fiscal
year 2000 was 55.6 million US dollar. For the year 2001, the export from India was 70.1 million
export was 418 million US Dollar. In year 2012, the export was 566.3 million US Dollar,
whereby in year 2013, the export was 543.3 million US Dollar.7

5
Free Trade between The Republic of India and the Democratic Socialist Republic of Sri Lanka, Retrieved from
http://www.indiantradeportal.in/vs.jsp?lang=1&id=0,1,63,76, on, September 15, 2018.
6
Indo –Sri Lanka free trade agreement (Sri Lanka Export Development Board, April 2014), Retrieved from,
http://www.srilankabusiness.com/pdf/indosrilankaedbfinal.pdf, on, September 15, 2018.
7
In Indo –Sri Lanka free trade agreement , Sri Lanka Export Development Board, 6, pp-5, Retrieved September 15,
2018 from http://www.srilankabusiness.com/pdf/indosrilankaedbfinal.pdf.

3
It is been seen that after the trade effect have taking place as there is been an sharp rise in the
trade between India and Sri Lanka as a result of which the economy is rising since, commodity
like tea and like of articles of copper, electric machinery . While India exported some of the
product like Mineral Fuel, Oil, Vehicles, Iron and Steel etc. The trade is giving an “border-
effect” to both of the nations.8

The Sri Lankan economic growth process has become increasingly import intensive, much more
than becoming export generating. This invites attention of the Sri Lankan policy makers as this
general trend of worsening “terms-of-trade imbalance” would mean further import dependence
when the economy seeks accelerated growth, resulting in medium-term balance of payment and
external financial implications on the country’s economy. therefore there is an urgent necessity
to enhance the economy’s overall “competitiveness” with policy priority, so that both import
substitution and export promotion objectives would be supported.

8
In Vivek Joshi, An Econometric Analysis of India- Sri Lanka free trade agreement, 8, (pp-22), The Graduate Studies.
Geneva.

4
c) India and Malaysia

The Republic of India and government of Malaysia have signed an agreement on Comprehensive
Economic Cooperation Agreement between India and Malaysia (CECA), in which both the
countries strive towards economic and social benefits for raising the social living condition and
for ensurement of high and steady growth in real income in case of their respective territories.
The agreement was signed on 27 October 2010 in Kuala Lumpur, Malaysia. The export from
India to Malaysia was in range of US $ 1billion to US $ 5 billion by 2012. The overall welfare
gain was from range US$662 million to US$2.24 billion.9

According to Malaysian Investment Development Authority (MIDA), Indian total venture into
Malaysia from 1980-2014 has been around US$ 2.31 billion which incorporate Jan-Dec 2014 –
US$ 225.50 million. 13 projects were affirmed and implemented with Indian support in Non-
Metallic Mineral Products, Textiles and Textile Products, Chemical and Chemical Products,
Fabricated Metal Products and Machinery and Equipment proportionate to US$ 2.93 million in
2014 . At present, there are in excess of 115 Indian organizations including 61 Indian joint
endeavors, 7 Indian Public Sector Undertakings and 60 Indian IT organizations working in/from
Malaysia. Their territories of task are fabricate of Automobile related exercises ,Textiles and
Yarn, Drugs and Pharmaceuticals, Specialty Chemicals, Steel Furniture, Rubber Products,
Biotechnology, Services in Information Technologies, Healthcare, and so forth.

It was seen that there was an increase in collaborative services between the two companies in
case of financial services, software development, biotechnology, education, tourism, transport,
human resource development etc.10

9
Report on the joint study group on the feasibility of establishing a comprehensive economic cooperation
agreement between India and Malaysia, 7, Retrieved September 16, 2018 , from,
http://commerce.nic.in/publications/India_Malaysia_JSG_Report_Adopted_11_08_2007.pdf?id=14&bcsi_scan_D4
A612CF62FE9576=0&bcsi_scan_filename=India_Malaysia_JSG_Report_Adopted_11_08_2007.pdf.
10
Report on the joint study group on the feasibility of establishing a comprehensive economic cooperation
agreement between India and Malaysia, 6, Retrieved September 16, 2018 , from,
http://commerce.nic.in/publications/India_Malaysia_JSG_Report_Adopted_11_08_2007.pdf?id=14&bcsi_scan_D4
A612CF62FE9576=0&bcsi_scan_filename=India_Malaysia_JSG_Report_Adopted_11_08_2007.pdf.

5
d) India and Korea

India and Korea entered into an agreement on August 7, 2009, which is known as
Comprehensive Economic Partnership Agreement (CEPA). The agreement focuses on providing
the better access to Indian service industry in South Korea.

The increasing Liberalization of the Indian economy has increased trade and investment flows
between India and Korea. During 1991 to 2007, the value of Indian exports to Korea increased
from $0.24 billion to $2.46 billion while Indian imports from Korea increased from $0.314
billion to $5.4 billion during the same period (UNCOMTRADE, 2008). At present, India ranks
11th among export destinations and 16th among sources of imports for the Korean economy. The
share of both countries in their respective exports and imports has increased over the years. In
1990, Korea’s share in Indian exports and imports was 1.01 and 1.28 per cent respectively. These
increased to 1.69 and 2.69 per cent in 2007 Korea’s share in Indian imports touched a peak in
2003 and declined thereafter whereas Korea’s share in India’s total exports remained almost
stable till 2000 but increased to around 2 per cent in 2006. Between 1991 and 2007, India’s
exports to South Korea increased 10 times while imports rose more than 17 times, resulting in an
increase in the trade deficit. Indian exports and imports had average growth rate of around 10
and 14 per cent annually during 1991 to 2007.In the bilateral trade the economy of both countries
rose by US $ 17.57 million, whereas in the fiscal year of 2011 the growth reached to 20.57
million US Dollar. There was a slowdown in the year 2015, which reduced the Korea import
from India by 19.6 % to 4.24 billion US Dollar.11

It is said by the commerce and Industry Minister Nirmala Sitharaman that there has been 62
percent of export to India are enjoying while the benefit of CEPA with India is around 80 percent
of Korean exports to other trade partner, which are availing the advantages of CEPA Korea has
with those countries.12

11
Embassy of India, India-RoK Trade and Economic Relations, Retrieved September 16, 2018 from
https://www.indembassy.or.kr/pages.php?id=23.
12
The Hindu, India, South Korea to review free trade pact tomorrow, Retrieved September 16, 2018 from
http://www.thehindu.com/business/Economy/India-South-Korea-to-review-free-trade-pact-
tomorrow/article14428055.ece.

6
e) India and Singapore.

India and Singapore signed a treaty named Comprehensive Economic Cooperation Agreement
(CECA) , it is an free trade agreement to strengthen bilateral trade between India and Singapore.
The treaty aims in improving the efficiency and competitiveness of their manufacturing and
services sector and by expansion of trade and investment between the parties.13The treaty was
signed on 25 June 2005.

As per information discharged by the Department of Industrial Policy and Promotion (DIPP),
Singapore keeps on being the biggest investor in India among the ASEAN nations and the
second biggest among all nations with FDI inflows into India, totaling to US$ 2.4 billion - 2009-
10. According to Ministry of Commerce and Industry said that total trade during 2008-09 was
US$ 16.1 billion, an expansion of 3.86 % over US$ 15.5 billion out of 2007-08.

After the signing of the CECA treaty the commercial ties of the two nations have expanded
drastically, the trade reached 17.44 million US Dollar in 2010-11. Singapore has also emerged as
one of the largest source of FDI inflow into India amounting to 15.67 billion during the period
April 2000- November 2011.14The Indian government is getting a lot of benefit from the treaty
whereby they have opened a new chain of bank like of Indian Bank, Axis Bank, State bank of
India etc. The agreement also is given employment opportunities.15

13
Indian Trade Portal, Comprehensive Economic Cooperation Agreement between the Republic of India and the
Republic of Singapore(CECA), Retrieved September 16, 2018 from
http://files.indiantradeportal.in/uploads/files/India%20Singapore%20Ceca/ch1.pdf
14
Rikvin, Comprehensive Economic Cooperation Agreement (CECA-INDIA), Retrieved September 16, 2018 from
https://www.rikvin.com/blog/comprehensive-economic-cooperation-agreement-ceca-india/.
15
Rikvin, Comprehensive Economic Cooperation Agreement (CECA-INDIA), Retrieved September 16, 2018 from
https://www.rikvin.com/blog/comprehensive-economic-cooperation-agreement-ceca-india/.

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 India and WTO Relationship

The agreement was signed between India and World Trade Organization (WTO) ON 5th June
1995. India joined WTO for an objective in improvement in its trade and services, whereby it
had objectives to improve in the basic telecommunication services, maritime communications
etc. after joining the WTO India had been benefitted for 745 billion US Dollar by the end of
fiscal year 2005. It has been benefited in the areas of clothing sector by 60 %, in the agriculture
and forestry and fishery sector by 20 % and in case of food and beverages by 19 percent. There is
also an reduction in agricultural subsidiaries and barriers to export in cases of agricultural
products from India as it will increase. In case of the multilateral rules and disciplines in regard
to the anti-dumping , subsidies and countervailing measures , and dispute settlement machinery
will ensure an great security in cases of international trade, as it is favoring an environment for
India international business.16

One of the conflicts of India in WTO is against the United States of America, whereby in which
the complaint has been bought by United States in regard of the certain measures relating to solar
cells and solar modules. On 6 February 2013, the United States requested consultation with
India, concerning the measures of India in aspect of the domestic content requirement under the
Jawaharlal Nehru National Solar Mission (“NSM”) for solar cells and solar modules. The United
States of America claims that measures that are inconsistent are in aspect of Article III: 4 of the
GATT 1994, Article 2.1 of the TRIMS Agreement and Article 3.1(b), 3.2, 5(c), 6.3(a) and (c)
and 25 of the SCM Agreement. However India has argued that these measures used are justified
under Article xx (d) of the GATT 1994 on the grounds they have been securing India’s
compliance as per the “laws and regulations”, as it is requiring them to take steps in promotion of
sustainable development. The panel found that most of the instrument identified by India is not
constituting “laws or regulations” as per the meaning of Article xx (d), or were not laws and
regulations in aspect of the measures of Article xx (d), or not were the laws or regulations aspect
of which DCR measures “secure compliance”. Therefore, the panel found that India has failed to
demonstrate the challenged measures are justified under Article xx (d). The panel sustained the
United States of America claims that India’s DCR measures are not consistent with WTO non-

16
International Business, Impact of WTO on India, Retrieved September 16, 2018 from http://courseblog-
ib2208.blogspot.in/2009/02/impact-of-wto-on-india.html.

8
discrimination obligation as per the Article III:4 of the GATT 1994 and as per the ARTICLE 2.1
OF THE trims agreement. The panel also found that measured is not covered by the government
procurement exemption as per Article III:8(a) of the GATT, 1994, as the product which is being
procured electricity is not in competitive relationship with the discriminated product ie solar cells
and modules. In response of this India informed DSB that in pursuance of Article 21.3 of the
DSU , it is intended to implement the DSB’s recommendation and in the ruling of the dispute.
On 1 December 2016 , the United States of America have informed India that in order for
allowing sufficient time for them to discuss over a mutually agreed period , they have agreed for
deadlines for arbitration as per Article 21.3(c) of the DSU.17

17
World Trade Organization, DS456:India- Certain Measures relating to Solar Cells and Solar Modules, Retrieved
September 16, 2018 from https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds456_e.htm.

9
BIBLIOGRPAHY AND IN-TEXT REFERNCING

1) Comprehensive Economic Partnership Agreement between India and Japan (CEPA),

“Article1- Objective”, Retrieved from
http://commerce.nic.in/trade/ijcepa_basic_agreement.pdf, on, September 15, 2018.
2) Press information Bureau , Government of India , Prime Minister’s office, “ Joint
declaration between the leaders of the Republic of India and Japan on the conclusion
of the Comprehensive Economic Partnership Agreement between the Republic of
India and Japan”, Retrieved from
http://pib.nic.in/newsite/PrintRelease.aspx?relid=66563, on, September 15, 2018.
3) Dr Shamshad A Khan, “India – Japan Economic and Trade partnership: Suggestions
to make it Balanced and Mutually Beneficial”, Retrieved from
http://downloadpdfebook.herokuapp.com/?s=OMPREHENSIVE+ECONOMIC+PAR
TNERSHIP+AGREEMENT++++BETWEEN+THE+REPUBLIC+OF+INDIA+AND
+JAPAN+, on, September 15, 2018.
4) CEPA has helped strengthen Indo- Japan economic ties, Retrieved from
http://www.thehindubusinessline.com/economy/cepa-has-helped-strengthen-
indojapan-economic-ties/article4784473.ece, on, September 15, 2018.
5) Free Trade between The Republic of India and the Democratic Socialist Republic of
Sri Lanka, Retrieved from
http://www.indiantradeportal.in/vs.jsp?lang=1&id=0,1,63,76, on, September 15,
2018.
6) Indo –Sri Lanka free trade agreement (Sri Lanka Export Development Board, April
2014), Retrieved from,
http://www.srilankabusiness.com/pdf/indosrilankaedbfinal.pdf, on, September 15,
2018.
7) In Indo –Sri Lanka free trade agreement , Sri Lanka Export Development Board, 6,
pp-5, Retrieved September 15, 2018 from
http://www.srilankabusiness.com/pdf/indosrilankaedbfinal.pdf.

10
8) In Vivek Joshi, An Econometric Analysis of India- Sri Lanka free trade agreement, 8,
(pp-22), The Graduate Studies. Geneva.

9) Report on the joint study group on the feasibility of establishing a comprehensive

economic cooperation agreement between India and Malaysia, 7, Retrieved
September 16, 2018 , from,
http://commerce.nic.in/publications/India_Malaysia_JSG_Report_Adopted_11_08_2
007.pdf?id=14&bcsi_scan_D4A612CF62FE9576=0&bcsi_scan_filename=India_Mal
aysia_JSG_Report_Adopted_11_08_2007.pdf.

10) Report on the joint study group on the feasibility of establishing a comprehensive
economic cooperation agreement between India and Malaysia, 6, Retrieved
September 16, 2018 , from,
http://commerce.nic.in/publications/India_Malaysia_JSG_Report_Adopted_11_08_2
007.pdf?id=14&bcsi_scan_D4A612CF62FE9576=0&bcsi_scan_filename=India_Mal
aysia_JSG_Report_Adopted_11_08_2007.pdf.

11) Embassy of India, India-RoK Trade and Economic Relations, Retrieved September
16, 2018 from https://www.indembassy.or.kr/pages.php?id=23.

12) The Hindu, India, South Korea to review free trade pact tomorrow, Retrieved
September 16, 2018 from http://www.thehindu.com/business/Economy/India-South-
Korea-to-review-free-trade-pact-tomorrow/article14428055.ece.
13) Indian Trade Portal, Comprehensive Economic Cooperation Agreement between the
Republic of India and the Republic of Singapore(CECA), Retrieved September 16,
2018 from
http://files.indiantradeportal.in/uploads/files/India%20Singapore%20Ceca/ch1.pdf
14) Rikvin, Comprehensive Economic Cooperation Agreement (CECA-INDIA), Retrieved
September 16, 2018 from https://www.rikvin.com/blog/comprehensive-economic-
cooperation-agreement-ceca-india/.

11
15) Rikvin, Comprehensive Economic Cooperation Agreement (CECA-INDIA), Retrieved
September 16, 2018 from https://www.rikvin.com/blog/comprehensive-economic-
cooperation-agreement-ceca-india/.
16) International Business, Impact of WTO on India, Retrieved September 16, 2018 from
http://courseblog-ib2208.blogspot.in/2009/02/impact-of-wto-on-india.html.
17) World Trade Organization, DS456:India- Certain Measures relating to Solar Cells
and Solar Modules, Retrieved September 16, 2018 from
https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds456_e.htm.

12