India and Free-trade Agreements

Within Asia, India has signed bilateral FTAs with Sri Lanka (1998), Afghanistan (2003), Thailand (2004), Singapore (2005), Bhutan (2006), Nepal (2009), Korea (2009), Malaysia (2011) and Japan (2011). There have also been two regional trade agreements, the South Asian Free Trade Agreement (SAFTA, 2004) and the India-Association of Southeast Asian Nations Agreement (ASEAN, 2010). Outside Asia, FTAs have been agreed with Chile (2006) and MERCOSUR (2004). Recently, PTAs have begun to morph into mega-regional agreements, which would encompass a large share of world GDP and trade.

Mega-regionals, in other words, are PTAs on steroids. The two major mega-regionals are the Trans-Pacific Partnership (TPP), which has been signed but not yet ratified by member countries, and the Trans-Atlantic Trade and Investment partnership (TTIP), which is currently being negotiated. The TPP comprises twelve member countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam, as shown in the map below. The TPP will cover 40 percent of global GDP and 33 percent of world trade. TTIP, when concluded, will be a PTA between the United States and the European Community of 27 member states and representing �30 percent of global merchandise trade, about 40 percent of world trade in services, and nearly half of global GDP�. India is not part of these groupings.

Salient Features of the Foreign Trade Policy (Ftp) 2015-2020

Merchandise Export from India Scheme

The six different schemes of the earlier FTP (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agriculture Infrastructure Incentive Scrip, Vishesh Krishi and Gram Udyog Yojana and Incremental Export Incentive Scheme) which had varying sector-specific or actual user only conditions attached to their use have been merged into a single scheme, namely the Merchandise Export from India Scheme (MEIS). Notified goods exported to notified markets will be incentivized on realized FOB value of exports. Countries have been grouped into three categories�namely Category A: traditional markets, Category B: emerging & focus markets and Category C: other markets�for grant of incentives. The government has expanded the coverage of the MEIS on 29 October 2015 by adding 110 new items. The incentive rate/country coverage of 2228 items has been enhanced.

Service Export from India Scheme

The Served from India Scheme (SFIS) has been replaced with the Service Export from India Scheme (SEIS). Thus it provides for incentives to all service providers of notified services who are providing services from India.

Incentives (MEIS & SEIS) to be available for SEZs, FTP 2015-20 extends the benefits of the MEIS and SEIS to special economic zones (SEZ) as well, which will give a new impetus to the development and growth of SEZs.

Recent Measures for Trade Facilitation

The government has reduced the number of mandatory documents required for exports and imports to three each, which is comparable with international benchmarks.

The DGFT launched a �DGFT� mobile application in June 2015. The application allows exporters/importers to access foreign trade policy and other related documents in an easy-to-use searchable format and check status of transmission of various authorizations and shipping bills, etc.

The Niryat Bandhu Scheme has been galvanized to achieve the objectives of Skill India.

WTO Negotiations and India

The Tenth Ministerial Conference of the WTO was held in Nairobi, Kenya during 15-19 December 2015. This was the first such meeting to be hosted by an Africa nation. The outcomes of the Conference, referred to as the �Nairobi Package� include Ministerial Decisions on agriculture, cotton and issues related to least developed countries (LDCs). These cover public stockholding for food security purposes, a Special Safeguard Mechanism (SSM) for developing countries, a commitment to abolish export subsidies for farm exports particularly from the developed countries and measures related to cotton. Decisions were also made regarding preferential treatment to LDCs in the area of services and the criteria for determining whether exports from LDCs may benefit from trade preferences.

The divergence in viewpoints as regards the fate of the Doha Round continued during the Conference. The Nairobi Ministerial Declaration reflects divergence amongst the WTO membership on the relevance of rearming the Doha Development Agenda (DDA) as the basis of future negotiations. is was despite the fact that India, along with many other developing countries, from groups such as the G-33, LDCs, and the Africa Group, wanted a reaffirmation of the mandate of the Doha Round. India pointed this out in a written submission to the Director General, WTO and the Chair of the Tenth Ministerial Conference, the Kenyan foreign minister as well as in a statement at the closing ceremony on 19 December 2015. While reflecting that there are divergences, the Ministerial Declaration also notes the �strong commitment of all Members to advance negotiations on the remaining Doha issues.� It records that WTO work would maintain development at its centre. It also reams that provisions for special and differential treatment shall remain integral.

As regards the introduction of other new issues for discussion, the Declaration acknowledges the differences in views and states that any decision to launch negotiations multilaterally on such issues would need to be agreed by all Members. As the future of the Doha Round appeared in doubt, India sought and succeeded in obtaining a reaffirmative Ministerial Decision on Public Stockholding for Food Security Purposes honouring both the Bali Ministerial and General Council Decisions. The decision commits members to engage constructively in ding a permanent solution to this issue. Similarly, a large group of developing countries has long been seeking a SSM for agricultural products. In order to ensure that this issue remains on the agenda of future discussion in the WTO, India negotiated a Ministerial Decision which recognises that developing countries will have the right to have recourse to an SSM as envisaged in the mandate. Members will continue to negotiate the mechanism in dedicated sessions of the Committee on Agriculture in Special Session. e WTO General Council has been mandated to regularly review progress of these negotiations.

WTO Members also agreed to the elimination of agricultural export subsidies subject to the preservation of special and differential treatment for developing countries such as a longer phase-out period for transportation and marketing export subsidies for exporting agricultural products. Developed countries have committed to removing export subsidies immediately, except for a few agricultural products, and developing countries will do so by 2018. Developing countries will keep the ability to cover marketing and transport subsidies for agriculture exports until the end of 2023, and the LDCs and net food-importing developing countries would have additional time to cut such export subsidies. The Ministerial Decision contains disciplines to ensure that other export policies are not used as a disguised form of subsidies. These disciplines include terms to limit the benefits of financing support to agriculture exporters, rules on state enterprises engaging in agriculture trade, and disciplines to ensure that food aid does not negatively affect domestic production. Developing countries, such as India, will have a longer implementation period.

One of the Decisions adopted extends the relevant provision to prevent �evergreening� of patents in the pharmaceuticals sector. s decision would help in maintaining an affordable and accessible supply of generic medicines. India supported outcomes on issues of interest to LDCs including enhanced preferential rules of origin for LDCs and preferential treatment for LDC services providers. India already offers duty-free, quota-free access scheme to all LDCs, which provides a comprehensive coverage with simple, transparent and liberal rules of origin. India has also recently made available substantial and commercially meaningful preferences in services to LDCs.

Another area under negotiation in Nairobi dealt with the rules on fisheries subsidies. Several countries, such as China, Egypt, South Africa, Korea and Saudi Arabia, were opposed to disciplining rules on fisheries subsidies due to the lack of clarity. The overwhelming opposition to this item on the agenda was in tune with India�s position. There was no outcome in this area of the negotiations. On the issue of rules on Anti-dumping, India strongly opposed a proposal that would give greater power to the WTO�s Anti-Dumping Committee to review Members� practices. There was no convergence in this area and, hence, no outcome was achieved. At the Ministerial Conference, a group of 53 WTO members, including both developed and developing countries, agreed on the timetable for implementing a deal to eliminate 201 Information Technology products. Duty-free market access to the markets of the members eliminating on these products will be available to all WTO members. Though not a party to the Agreement, India can also avail of such duty-free market access.

Written by princy

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