Free trade agreements and India
This is a collection of articles archived for the excellence of their content. |
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A chronology
1998 – 2024; 2025
Sidhartha, July 25, 2025: The Times of India
From: Sidhartha, July 25, 2025: The Times of India
New Delhi : The India-UK free trade agreement will take at least a year to be implemented, but it sets the template for some of the high-stakes negotiations that New Delhi is currently engaged in. With India agreeing to cut the duty on imported automobiles — at least the high-end ones — to 10% over the next few years, a similar offer is likely to be made for cars imported from EU member nations such as France, Germany and Italy. It also sets the tone for the bilateral trade deal with the US, as 10% will act as a floor of sorts.
The Economic Cooperation and Trade Agreement with Australia set the tone for allowing lower duty import of wines and spirits, something that was a taboo until three years ago. Or take the treaty with the UAE, which opened govt procurement for the first time. It paved the way for a similar deal with the UK.
In agriculture, govt officials are citing the UK, European Free Trade Association (comprising Switzerland and Norway) and Australia deals to block American President Donald Trump from opening the Indian market to US dairy, maize and soybean. India has so far managed to convince its trade partners that it cannot risk the livelihood of millions of low-income farmers, given the large farms in the developed world. The same argument is being made to New Zealand, a competitive dairy exporter, as well as to EU. While pushing for the final deal with India, Australia, too, had made fresh overtures for dairy.
In trade negotiations, every deal is unique, but what has been opened becomes a floor for future talks. What the other trading partner offers is also critical.
The new FTAs India is signing may impact older ones. India, which wants ASEAN members, Japan and South Korea to review existing trade deals, may face fresh demands. Japan, South Korea and Thailand may seek parity on automobile tariffs under the revised pacts. India has over a dozen trade agreements, and each partner is closely watching the new ones in the pipeline.
Thailand, 2003/ 2004
[January 29, 2026: The Times of India]
(From Grok)
The Early Harvest Scheme (EHS) between India and Thailand was part of their Framework Agreement for establishing a Free Trade Area, signed on October 9, 2003.Implementation of the EHS (covering tariff reductions on 82–83 specific items like fruits, electronics, and auto parts) began in phases from March 1, 2004, or more commonly referenced as effective from September 1, 2004 (following the protocol signed in July/August 2004 to operationalize it).This was a precursor to a fuller FTA, which remains under discussion without a comprehensive deal signed yet. Sources: Official Indian Ministry of Commerce pages and trade portals confirm these dates.
2003-2026
Sidhartha, January 29, 2026: The Times of India
New Delhi: India has come a long way from the early days of its journey towards FTAs, which really began with an “early harvest scheme” with Thailand that had limited coverage of under 100 products. The duty concessions to the South East Asian country meant that companies such as Honda and Sony began importing gear boxes and TV sets, instead of producing them locally, putting govt on the defensive.
What followed was a “careful calibration” with the govt refusing to cut duties on “sensitive sectors” such as wine and spirits and automobiles. The fear was that domestic manufacturing would be hurt and grape farmers would be adversely impacted. In any case, anything to do with farmers was a no-go zone.
Things began to change with an interim deal with Australia in 2022, which followed India’s decision to walk out of RCEP, the regional grouping led by China. For the first time, govt showed boldness in lowering tariffs for wine above a specified value but sought to win over local producers by assuring technical support from their competitors. It also tested the quota system, offering concessions on some farm products, but for limited quantities.
With every trade deal, the list got longer. So, in came chocolates and watches in the pact with European Free Trade Association, comprising Switzerland, Norway, Iceland and Liechtenstein. Similarly, tradeoffs started going beyond goods and services — something that the govt failed to do in Asean FTA — to include investment promises as EFTA committed a fresh FDI of $100 billion.
By the time govt finalised its agreement with EU, eighth in four years. barring cereals, pulses, dairy and genetically modified food, the red channel list became much shorter with the Indian negotiators learning to make trade-offs.
So, if duty was slashed on French or Spanish wine, it was done in return for allowing limited quantities of grapes to European markets. Similarly, pears and apples were allowed, but in limited quantities and with features such as a minimum import price, ensuring that the landed cost of apples does not fall below Rs 96 a kg.
The benefits are also in line with the opportunity that a market offers. Govt decided against offering any concessions to British electric vehicles when it finalised the FTA last May. But eight months later, it offered a limited number of EVs as part of the EU deal.
“Every FTA stands on its own foot,” commerce minister Piyush Goyal said on Tuesday. The change in approach is also visible in the so-called “new issues”, earlier called non-trade issues by Indian negotiators, being part of the trade engagement. So, the “modern FTAs” include intellectual property rights, SMEs, digital trade, labour and environment, but the commitments have not extended beyond what India has committed at international forums, addressing concerns around patent laws being diluted.
“It is how you negotiate these issues. We are firm on certain aspects and we will stick to them in our other engagements as well,” a senior official said.
