- FTAs are a key component of India’s trade and foreign policy, especially from 2003-04 onwards.
- They are preferential arrangements where members reduce tariffs on trade among themselves.
- Significance:
- Increase trade with FTA countries.
- Provide preferential market access for Indian exports.
- Help diversify trade partners.
- Can boost specific sectors through tariff reductions.
- However, India’s FTAs have increased imports more than exports.
- India maintains relatively high tariffs, leading to larger tariff reductions after signing FTAs.