In addition, New Delhi wanted to accelerate discussions with the members of the European Free Trade Association – Switzerland, Norway, Iceland and Leichtenstein – on a separate trade pact, alongside discussions with the EU. It has also tried to revise its existing free trade agreements with ASEAN, Japan, Malaysia and South Korea to reduce its trade deficit with these countries. First, there have been a number of lessons learned from the experience of our previous free trade agreements. In 2018, a NITI Aayog note on free trade agreements highlighted India`s relentless and expanding trade deficits accumulated as a result of free trade agreements with ASEAN, Japan and Korea. It is important that the deficit has also increased for India`s dominant value-added sectors, due to a deterioration in the quality of India`s trade with its FTA partners. The People`s Republic of China has concluded bilateral trade agreements with the following blocs, countries and their two special administrative regions: Government of Bhutan, Government of India. (2006). Agreement on Trade and Transit between the Government of the Republic of India and the Royal Government of Bhutan. Ministry of Trade and Industry, Ministry of Trade and Industry: New Delhi, January. commerce.nic.in/trade/international_ta.asp?id=2&trade=i India`s tactical shift from multilateralism to bilateral engagements came at a crucial time. Even before Covid-19 created chaos, uncertainties in global trade have increased.
A trade war between the US and China and the collapse of the WTO`s appeal system had only multiplied the challenges for India, which had been a staunch defender of the multilateral trading system. Trade negotiations have been very difficult, especially with regard to agricultural products that were to benefit from concessions, mainly for palm oil. Another difficult topic has been the ceiling of the list of products to be liberalised for sensitive products on the lists which, by 2022, will not obtain concessions different from the normal route which should receive concessions by 2018. Since India agreed in early 2007 to abandon its position on palm oil, negotiations have progressed. In January 2007, in Cebu, Philippines, the two sides agreed to conclude a free trade agreement on products by July 2007. The aim was to achieve the proposed ASEAN-India Free Trade Agreement (AI-FTA) with regard to products other than services or investments. In March 2007, a meeting was held in Jakarta, during which India reduced the number of items on its list from 1,414 to 854 and eventually to 490. At the same meeting, India agreed to reconsider a 50% customs concession by 2018 – instead of 2022 – from the entry into force of the agreement – instead of 2012 – which will be granted for palm oil, tea, coffee and pepper at the same time.
Negotiations are still ongoing, as ASEAN is still not satisfied with India`s concessions and wants new concessions of 30% for palm oil and 20% for tea, coffee and pepper, which is not realistic for the Indian government. Brunei has also requested concessions on crude oil and natural gas. The mutually agreed date of July 2007 now seems too ambitious and the conclusion of the talks as soon as possible seems to be 200732 the next ASEAN+1 summit in November. A comprehensive analysis of trade between India and its main FTA partners, mentioned above, shows a significant increase in trade since the agreements went into operation. SAFTA came into force on 01 January 2006 and, according to data from the Ministry of Trade and Industry, bilateral trade between India and other SAFTA member countries increased from $6.8 billion in 2005-06 to $28.5 billion in 2018-19. . .