What has been Indias involvement with FTAs?
Over the last few years a number of FTAs have been signed with Asian neighbours like Sri Lanka and Singapore. Steps are being taken for the creation of free trading areas within South Asia and among the members of the ASEAN. The benefit to India from entering an FTA is limited when India is dealing with a free-trading country. Since India is a high tariff economy, an FTA gives the partner a clear benefit, but if the partner already has zero or near zero tariffs, (as is the case with Singapore) Indian exporters do not stand to gain much. The FTA does not give Indian exporters additional market access. While India has an average custom to total import ratio of around 20 percent, Singapore is a zero tariff zone, Srilanka’s is much lower at 5 percent and Thailand, with whom the next FTA is proposed to be signed has custom collections at 3.8 percent of total imports. Indian exporters gain little by getting preferential tariffs in these countries. It is their exporters who stand to gain. Ind
