Lok Sabha Question No. 3863 (UNSTARRED), answered on 2025-08-12
Subject: Negotiations on FTAs
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri Sudhakar Singh

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE

## LOK SABHA UNSTARRED QUESTION NO. 3863 ANSWERED ON 12/08/2025

## NEGOTIATIONS ON FTAs

## 3863. SHRI SUDHAKAR SINGH

Will the Minister of COMMERCE AND INDUSTRY ( वाणिज्य एवं उद्योग मंत्री ) be pleased to state:

- (a) whether the Government is currently having negotiations on Free Trade Agreements (FTAs) with other countries, including the UK, under which significant reduction in import duty is proposed;
- (b) if  so,  the  details  thereof  along  with  the  data  regarding  the  estimated  impact  on revenue due to the said tax cuts;
- (c) the major categories of product categories on which import duty is proposed to be reduced under the said FTAs along with the likely average reduction in percentage terms;
- (d) whether the Government has assessed the likely impact of the said agreements on the products manufactured in India and if so, the details thereof; and
- (e) the manner in which the Government is balancing the said agreements keeping in view of the goals envisaged under 'Make in India' and 'Aatmanirbhar Bharat' so as to prevent any loss to the domestic industry?

## ANSWER

वाणिज्य एवं उद्योग मंत्रालय में राज्यमंत्री ( श्री णिणिन प्रसाद ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI JITIN PRASADA)

(a) to (e) The negotiation of trade agreements is an ongoing process in the government. It has signed 15 Free Trade Agreements and 6 Preferential Trade Agreements till date. Most recently, the Government has signed the India-UK Comprehensive Economic and Trade Agreement  (CETA)  on  24 th   July,  2025.  It  will  be  implemented  after  ratification.  Further, negotiations  for  India-Oman  Comprehensive  Economic  Partnership  Agreement  (CEPA) have been concluded. A list of the ongoing negotiations is given at Annexure.

India-UK CETA provides an unprecedented duty-free access to almost 99 per cent of India's exports to the UK, covering nearly 100% of the trade value. This includes labour intensive sectors such as textiles, leather, marine products, gems and jewellery, and toys as well as high-growth sectors like engineering goods, chemicals, and auto components etc.  This  will  spur  large-scale  employment  generation, empowering artisans,  women-led enterprises, and MSMEs. The services sector, a strong driver of India's economy, will also see wide-ranging benefits. The agreement provides greater market access in IT and ITenabled services, financial and legal services, professional and educational services, and digital trade. India has also secured an agreement on the Double Contributions Convention. This will exempt Indian professionals and their employers from social security payments in the UK for up to three years. The press note issued by the Department in this regard may be seen at https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154945&ModuleId=3.

Various policy areas including market access for Indian goods and services, mobility for professionals etc. are part of the ongoing negotiations.  India has opened 89.5% of its tariff  lines,  covering  91%  of  the  UK's  exports,  including  both  agricultural  and  industrial sectors. However, only 24.5% of the UK's export value will enjoy immediate duty-free market access.  India has safeguarded its sensitive sectors-dairy, cereals and millets, pulses, and vegetables and certain essential oils. Strategic exclusions also cover critical energy fuels, marine vessels, worn clothing, and critical polymers and their monofilaments, smart phones, optical  fibres  -  a  strong  stand  to  protect  farmers,  MSMEs,  and  national  interests. Strategically important products -particularly those where domestic capacity is being built under flagship initiatives like Make in India and PLI-concessions have been provided over extended periods of 5, 7, or even 10 years with gradual tariff reduction.

Revenue is notionally impacted for both the partner countries of the FTA with tariff reductions. This is expected to be offset in the medium to long term by increased trade volumes,  investment  flows,  enhanced  competitiveness  of  Indian  exports,  and  overall economic  growth.  Moreover,  the  agreement  has  been  carefully  calibrated  to  safeguard sensitive sectors, and the potential revenue implications have been considered within the broader objective of promoting trade-led development.

Free Trade Agreements (FTAs) are entered into with the concerned trading partner countries  primarily  with  the  aim  to  increase  the  bilateral  trade  and  economic  growth  by enlarging  the  scope  of  market  access  and  building  on  the  trade  complementarities  for increasing trade and investment, thereby providing enhanced export potential, generating benefits for industry, farmers, MSMEs and creating job opportunities. FTAs are negotiated with  the  endeavour  to  deliver  a  comprehensive,  balanced,  broad-based  and  equitable agreement based on the principle of fairness and reciprocity. It also ensures a level playing field for Indian exporters vis-a-vis their competitors in the trading partner countries.

In order to protect the interests of the domestic industry, FTAs provide for maintaining sensitive, negative or exclusion lists of items on which limited or no tariff concessions are granted. In addition, in case of surge in imports and injury to the domestic industry, a country is  allowed  to  take  recourse  to  trade  remedial  measures  such  as  anti-dumping  and safeguards on imports within the period as mutually agreed to by the parties under the FTAs. FTAs include provisions on Technical Barriers to Trade to promote mutual understanding of each  sides'  standards,  technical  regulations,  and  measures  to  enhance  transparency. Additionally, FTAs address non-technical barriers, thereby facilitating smoother and more effective  access  to  export  markets  for  Indian  goods.  FTAs  include  sub-committees  for review to align with emerging global requirements.

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## Annexure

|   Sl. No. | Name of the Agreement                                                                      |
|-----------|--------------------------------------------------------------------------------------------|
|         1 | India - Australia Comprehensive Economic Cooperation Agreement (Expansion of Ind-Aus ECTA) |
|         2 | India-European Union Free Trade Agreement                                                  |
|         3 | India-Sri Lanka Economic and Technology Cooperation Agreement                              |
|         4 | India - Peru Free Trade Agreement                                                          |
|         5 | India-Chile Comprehensive Economic Partnership Agreement                                   |
|         6 | India and New Zealand Free Trade Agreement                                                 |
|         7 | India and USA Bilateral Trade Agreement (BTA)                                              |
|         8 | ASEAN-India Trade in Goods Agreement (AITIGA) (Review)                                     |
|         9 | India-Korea CEPA (Review)                                                                  |