India-EU Free Trade AgreementJanuary 3, 2023 2023-01-05 12:44
India-EU Free Trade Agreement
India-EU Free Trade Agreement
- India and the European Union (EU) resumed negotiations, after a gap of over eight years, for a comprehensive free trade agreement.
- It is a move aimed at strengthening economic ties between the two regions.
- India had started negotiations for a trade pact with the EU in 2007, but the talks stalled in 2013 as both sides failed to reach an agreement on key issues, including customs duties on automobiles and spirits, and the movement of professionals, investment protection and GIs.
Free Trade Agreement (FTA):
- It is a pact between two or more nations to reduce barriers to imports and exports among them.
- Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
- The concept of free trade is the opposite of trade protectionism or economic isolationism.
European Union :
- It is an international organisation consisting of European Countries, which was formed in 1993.
- It came into force after the signing of the Maastricht Treaty by 28 countries.
- The Maastricht Treaty is also known as the Treaty of the European Union (TEU).
- Currently, it is a group of 27 countries that operate as a cohesive economic and political block.
- Importance of the European Union for India :
- India’s bilateral trade with the EU amounted to $116.36 billion in 2021-22.
- At present, the EU is India’s second largest trading partner after the US, and the second largest destination for Indian exports.
- The trade agreement with the EU would help India further expand and diversify its exports of goods and services, including securing the value chains.
Q. With reference to the Free Trade Agreement, consider the following statements :
- Free trade agreement is an improved level of economic integration compared to preferential trade agreement.
- So far, India has signed 13 Free Trade Agreements (FTAs) with its trading partners.
- Comprehensive Economic Cooperation Agreement (CECA) is one of India’s Free Trade Agreements.
Which of the statements given above is /are correct?
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer : D
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