The government has constituted an independent working group under the Chief Economic Advisor to examine the impact of free trade agreements (FTAs) signed by India. The working group would undertake an analysis of bilateral trade and investment flows with the countries with which India has signed FTAs, comprehensive economic cooperation agreements (CECAs) and comprehensive economic partnership agreements (CEPAs), at the aggregate and the sectoral level.

It would also analyse the impact of these agreements on certain specific sectors in greater detail, she said.  India has signed FTAs with countries such as Japan, South Korea, Singapore, and ASEAN group. India and Iran also have agreed to examine the scope and the feasibility of entering into a preferential trade agreement.

What is Free Trade Agreement?

• FTA is a treaty between two or more countries to establish a free trade area where commerce in goods and services can be conducted across their common borders, without tariffs or hindrances but (in contrast to a common market) capital or labor may not move freely.
• Member countries usually impose a uniform tariff (called common external tariff) on trade with non-member countries.
• When there is a free trade agreement it makes it a lot easier for countries to deal with each other and work out good deals.