India Preferential Trade Agreements

Dilshod Akhatov, Uzbekistan`s ambassador to India, said India holds a special place in Uzbek foreign policy. “The economic and trade potential of the two countries is not fully exploited and we need to mutually increase our qualitative trade volumes by improving bilateral trade,” he added. A free trade agreement is a preferential regime in which members reduce tariffs on trade between themselves while maintaining their own tariffs for trade with non-members. India accounts for 40% of US imports of generic drugs, including hydroxychloroquine malaria, touted by US President Donald Trump in the fight against the coronavirus. To benefit from preferential treatment for pharmaceutical exports, Prime Minister Narendra Modi`s administration is throwing the carrot to open its dairy and agricultural markets to the Trump administration. The TPP includes twelve member countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam, as shown in the map below. The TPP will cover 40% of global GDP2 and 33% of world trade. The proposed India-Mauritius Economic Cooperation and Partnership Agreement (CECPA) aims to mutually use the two countries in the field of trade in goods and services, he said. However, both sides tried to revive trade talks earlier this year, when Covid-19 hit and forced authorities to shift the focus on fighting the pandemic.

Over the years, India has become an increasingly important partner for the EU. It has always been for Britain. “I think you will see in the coming months a big boost to preferential trade deals, both with the EU and with the UK,” said the CEO of India Inc. Group. Goyal said removing barriers to trade between India and Europe is a must to move forward, given that the EU is India`s main trading bloc, with merchandise trade of around $105 billion in 2019. It is also the second destination for Indian exports. At the India-EU summit in July, Prime Minister Narendra Modi called for a further strengthening of relations with the EU, covering several areas of mutual interest, including trade, investment and climate change. The Preferential Agreement (PS) or the Generalised System of Preferences (GSP) is a special status granted by different countries in trade. In the United States, it aims to foster economic growth in the developing country and provides for the duty-free importation of 4,800 products from 129 designated beneficiary countries and territories. GSP was introduced on January 1, 1976 by the Trade Act of 1974, the U.S. government said. However, the Indian government believes that the plan has become widespread since the creation of the World Trade Organization (WTO) in 1994.

India is open to the idea of a preferential trade agreement with the EU in order to achieve faster results before negotiating a more ambitious free trade agreement (FTA), negotiated since 2007. PPE allows countries to trade in a small number of goods, which reduces volume. Trade and Industry Minister Piyush Goyal told a meeting on “collaborative economic growth between the EU and India” on Wednesday that India hopes to work with the EU towards a free trade agreement,” “perhaps starting with a preferential trade agreement for early harvest to achieve faster results,” he said in an official statement.