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What is a free trade agreement (FTA)? How are FTAs important for India? What are the various issues that are involved in FTA negotiation? How can the issues be resolved?

Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

2. What is a free trade agreement (FTA)? How are FTAs important for India? What are the various issues that are involved in FTA negotiation? How can the issues be resolved?  (250 words)

Difficulty level: Moderate

Reference: The HinduInsights on India

Why the question:

To achieve the export target of $2 trillion by 2030, India is going the whole hog on free trade agreements (FTAs). India is negotiating FTAs with countries such as the European Union, Canada, the U.K., and Israel.

Key Demand of the question:

To write about FTAs, its importance, issues involved in it and ways to overcome it.

Structure of the answer:

Introduction: 

Begin defining what FTAs are.

Body:

First, write about the major components of the FTA.

Next, write about the importance of FTA to India – economic growth, eliminate tariff barriers, diversify investments etc.

Next, write about the various issues in FTA negotiation – tariff reduction impacting the entire manufacturing and the agricultural sector; rules on services trade; digital issues such as data localisation; intellectual property rights etc.

Next, suggest ways to overcome the above.

Conclusion:

Conclude by writing a way forward.