India Plans to Boost Free Trade Agreement (FTA) Utilisation for Economic Growth
Government aims to increase benefits from existing FTAs by improving their usage.
Source: Economic TimesThe Indian government is developing a strategy to better utilise its existing Free Trade Agreements (FTAs). This plan aims to help Indian businesses, especially Micro, Small, and Medium Enterprises (MSMEs), take full advantage of the lower tariffs and easier market access offered by these agreements. Currently, the utilisation rate of FTAs by Indian exporters is relatively low, estimated to be between 5% and 25%. By increasing this rate, India seeks to boost its exports, enhance competitiveness, and integrate more deeply into global supply chains. The initiative involves simplifying procedures
- India's current FTA utilisation rate is estimated to be between 5% and 25%.
- The government's new plan focuses on increasing awareness and simplifying procedures for businesses.
- The initiative aims to particularly benefit Micro, Small, and Medium Enterprises (MSMEs) by helping them access global markets.
- Better FTA utilisation is expected to boost India's exports and improve its competitiveness in international trade.
- The strategy involves collaboration between various government departments and industry stakeholders.
A pact between two or more countries to reduce or eliminate certain barriers to trade, such as tariffs and quotas, for goods and services. The goal is to make trade easier and cheaper between the participating countries, promoting economic growth and integration.
MSMEs are defined based on investment in plant and machinery/equipment and turnover. They are crucial for India's economy, contributing significantly to GDP, employment, and exports. The government provides various schemes and policies to support their growth and competitiveness.
An attached office of the Ministry of Commerce and Industry, Government of India. It is responsible for formulating and implementing the foreign trade policy of India. DGFT also issues licenses and regulates imports and exports.
Questions on FTAs often focus on their purpose, India's major FTA partners, and their impact on trade and economy. Be aware of the difference between FTAs, CEPA, and CECA.
Remember FTA = 'Free Trade Access'. It's about making it easier for goods to access other markets without high taxes.