It is important to note that India views free trade agreements as an important instrument for improving trade and investment and has signed a number of trade agreements with different countries or groups. India is one of the most advanced countries in Asia, with the maximum number of free trade agreements under way or under negotiation or proposed. According to the Asian Development Institute, India has currently in force, signed or negotiated 42 trade agreements (including preferential agreements). Thirteen of them are in force, one is signed but has not yet been implemented, 16 are being negotiated and 12 are proposed/in consultation or under study. Most of the free trade agreements in force in India are with Asian countries that are very different in terms of the level of their economic development. Overall, India`s experience in trade with its major free trade partners, with the exception of SAFTA, has not been very encouraging. While India has significantly increased its exports from its free trade agreement with SAFTA countries, the EPA with Korea and the ECSC with ASEAN have been more beneficial to these economies. However, in the case of the EPA with Japan, bilateral trade declined or stagnated after the first year of implementation, but with Japan, too, the trade deficit increased considerably. In addition to a number of domestic factors that have hampered the competitiveness of Indian exports and prevented India from using preferential market access in these partner countries, a number of FTA-related issues are responsible for a less favourable development of India`s trade relations with ASEAN, Korea and Japan. These issues include erroneous obligations, stricter rules of origin, a lack of awareness of free trade agreements and high compliance costs. It is therefore important that India is not satisfied with the opening of a review of the India-ASEAN free trade agreement, but the existing EPA provisions with Korea and Japan should also be evaluated to make them more trade-friendly and business-friendly. However, it is equally important that India at the same time develop all necessary measures to remove barriers to the overall competitiveness of exports in the country.
Mel Deshal. 2010. Bilateral Free Trade Agreement in SAARC and implications for SAFTA, In Sadiq Ahmed et.al, promoting economic cooperation in South Asia. Say Publications: New Delhi. Packaging and labelling issues are also not clearly defined under the ISFTA, which increases the cost of complying with concessions under the agreement. This is especially true for high-quality raw materials such as black tea and regular green tea (casual tea and tea bag), black and green tea flavoured (tea bags) flavored and regular, etc. Therefore, if the labelling rules are clearly defined and made available to traders, this will facilitate compliance and would not pose problems in clearing shipments when they enter India. ASEAN is one of India`s main trading partners. The ECSC with ASEAN came into force on January 1, 2010 and bilateral trade between the two parties increased from about $43 billion in 2009-10 to $97 billion in 2018-19. As with SAFTA`s Indian trade, bilateral trade between India and ASEAN grew faster than India`s total trade with the world, resulting in an increase of 9.4% to 11.5% of ASEAN`s share of Indian world trade. However, unlike India-SAFTA trade, Indian imports from ASEAN grew significantly faster than Indian exports to ASEAN. Another important point to take into account is that imports from ASEAN grew much faster than Indian imports from the world.
The faster growth in imports has led to a significant increase in India`s trade deficit with ASEAN, from less than $8 billion in 2009-10 to about $22 billion in 2018-19. ASEAN`s share