bilaterals.org logo
bilaterals.org logo

India

The Indian government has been active in seeking out bilateral trade agreements, with other so-called developing countries and the developed world as well.

India has signed limited FTAs with Sri Lanka (1998) and Thailand (2003) plus a number of preferential trade agreements (tariff concession schemes) with countries/blocs such as Afghanistan, Nepal, Chile and Mercosur.

India is also part of SAFTA (the South Asia FTA), BIMSTEC (aiming to develop an FTA), the Asia-Pacific Trade Agreement (a preferential trade agreement with Bangladesh, China, Laos, South Korea and Sri Lanka) and IBSA (the India-Brazil-South Africa triangle aiming to develop a trilateral South-South FTA).

At the end of June 2005, the government signed a Comprehensive Economic Cooperation Agreement with Singapore, what many consider India’s first "comprehensive" FTA. India also signed FTAs with ASEAN (2009), Korea (2009) and Japan (2010), which were later criticised for widening India’s trade deficit with the three trade partners. These deals were followed by another one signed with Malaysia (2011). India expects to upgrade its pact with Sri Lanka into a similar type of Comprehensive Economic Partnership Agreement.

In 2007-2008, India commenced FTA talks with European powerhouses EFTA (European Free Trade Area) and the EU (European Union), but in 2013 talks stalled with the Union, over issues such as market access given by India to automobiles and alcohol from the EU, and Delhi’s refusal to open up its public procurement and financial services sector like banking, insurance and e-commerce.

In 2010, it began talks with New Zealand and in 2011 with Australia, but they were put on hold in 2013 when India started negotiating the mega-regional RCEP (Regional Comprehensive Economic Partnership) agreement with the 10 ASEAN nations, Australia, China, Japan, New Zealand and South Korea. In November 2019, India pulled out of the RCEP negotiations, due to concerns over trade deficits, notably with China, and countries’ reluctance to open markets to Indian services and investments. RCEP has generated a lot of controversy and resistance at home, mostly from farmers, unions, dairy cooperatives and patients’ groups that were concerned about the impacts on medicines.

India dropping out of RCEP has led the country to renew its interest in bilateral talks. The Australia and New Zealand FTAs are in the process of being revived. India is looking into ways to restart negotiations with the EU and speed up those with EFTA. An India-US FTA has been on the table as well, which has angered farmers and unions at home because it would hurt local agriculture.

Apart from these deals, bilateral trade negotiations are going on with Bangladesh, Canada, Colombia, the GCC (Gulf Cooperation Council), Iran, Israel, the Russia-led Eurasia Economic Union, Uruguay, Venezuela, and Mauritius, the last of which would provide a foothold into Africa through the African Continental Free Trade Area. Further down the line, the government is in various stages of considering talks with Cambodia, China, Costa Rica, Egypt, Hong Kong, Indonesia, Korea, the Philippines, SACU (Southern African Customs Union) and the United Kingdom.

India has also signed 86 bilateral investment treaties (BITs) with a wide array of countries, even though only 13 of them are still in force. Following a few controversial investor-state disputes (ISDS), India terminated most of its BITs and released a revised model BIT in December 2015, which was to serve as a basis for future negotiations and should replace existing treaties. This new model tries to achieve more balance by, for instance, requiring investors to use local courts before turning to international arbitration and leaving out the highly contested provision on “fair and equitable treatment”. However, it is not clear how much the government is using it as a red line, rather than a starting point for negotiations.

last update: October 2020
Photo: Rico Gustav/CC BY 2.0



China May Get MFN Status
This may come as a surprise to the ministry of home affairs. Security concerns of the government’s intelligence agencies notwithstanding, the ministry of external affairs (MEA) is quietly pushing for a Bilateral Investment Promotion and Protection Agreement (BIPA) with China.
Bechtel and GE File Arbitration over Dabhol Power Company
Bechtel Enterprises Holdings, Inc. and GE Structured Finance (GESF) have filed an arbitration action against the Government of India to recover their investments in the Dabhol Power Company (DPC).
Nepal Govt to negotiate with India on BIPA
The government has finally announced to commence negotiations on long-unheeded Bilateral Investment Protection Agreement (BIPA) with India, which the southern neighbour had been pressing for the last five years.
Government in a tizzy as Dabhol defence cracks
The newly-appointed solicitor firm in London, Evershed, has backed out of the Dabhol arbitration case at the last minute, leaving the Union government in a quandary.
G.E., Bechtel file $1.2 b claim against Govt
BECHTEL Enterprises Holdings Inc and GE Structured Finance on Monday said that they have filed an international arbitration claim against the Government to recover their investments in Dabhol Power Company (DPC).
Govt Seeks 60 More Days To File Dabhol Defence
The government of India (GoI) has sought a 60-day extension from the Arbitral Tribunal in London for filing a defence statement after GE blocked the appointment of Evershed as India’s new solicitor firm in the UK.
PROSPECTIVE FTA WITH INDIA: Firms mull Thai bases
India’s private sector is welcoming the Thai-Indian free-trade agreement (FTA), with an increasing number of Indian companies planning to set up their manufacturing bases in Thailand prior to the deal being signed.
AP: India Exploring Free Trade Deals
India wants to explore possible free trade agreements with Japan, China and the United States, as negotiations on such deals with Southeast Asian countries progress, the commerce minister says.
India, Thailand may set an example of successful FTA
India and Thailand have agreed to moved faster in the direction of a free trade area (FTA) by reducing by half their applied levels of tariffs on 82 select commodities. This comes into effect from September 1, 2004.
FTA Protocol Likely With Thailand
India and Thailand will sign on Monday, a protocol to pave the way for establishing a free trade area between the two nations by 2010.