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Subject: Bilateral Relations

1. Major World Events
2. India’s Interests in neighbourhood
3. Effects of our Policies

  • China’s new land boundary law fits in with its expansionism

    Context

    The latest in the series of aggressive Chinese actions is the use of lawfare through the passing of the “Land Boundary Law” on October 21 which became effective this week.

    Background of the Chinese approach

    • The last residue of the Qing dynasty was wiped out in the 1911 revolution when China was established as a republic.
    • The republic was again overthrown in 1949 by the Chinese Communist Party.
    • Three successive Chinese governments in China refused to delineate or demarcate the boundary with either Tibet or India.
    • British archival records, many declassified points to attempts made by Imperial Britain to formally formulate a boundary with China.
    • Yet, all three regimes were united in their refusal to accept a formal limiting of China’s territorial expanse and kept their response ambiguous.
    • Even during the Simla Convention of 1913-14, when the Republic was ascendant in China, there was a vehement refusal to recognise any demarcation of boundaries between Tibet and China.

    Strong-arm tactics against India

    • Having operated from a maximalist position to settle its borders with 12 of its 14 neighbours so far, China has attempted to use the same strong-arm tactics with both India and Bhutan.
    • It has offered to forgo its claims in the larger parts of North Bhutan in lieu of gaining a relatively smaller area in West Bhutan.
    • Threat to Siliguri corridor: This seeming magnanimity is calculated to expand into the Chumbi Valley in the South, threatening the narrow and strategic Siliguri corridor in India.
    • In its latest move, China has made a new claim on Sakteng sanctuary in Bhutan which may form a launchpad for future operations against Tawang in Arunachal Pradesh.
    • China has also strengthened its collusion with Pakistan.
    • There is a deliberate attempt by China to physically link with Pakistan in the Northern Areas by removing the Indian wedge of DBO, the doorway to the Karakoram Pass.
    • A Training Mobilisation Order (TMO) issued by Xi Jinping in January 2020 called for “confrontational training” for its troops and officers to assess their preparedness, especially in light of the new reforms undertaken by the PLA.
    • These factors seem to be the tactical beginnings of China’s grand strategy which also saw China flexing in the South China Sea and Taiwan, almost simultaneously.

    China making use of lawfare and implications for India

    • The latest in the series of aggressive Chinese actions is the use of lawfare through the passing of the “Land Boundary Law”.
    • Formalises and legalises land Chinese grab: The law formalises and legalises China’s geographic creep towards Tawang, Arunachal Pradesh and parts of eastern Ladakh and creates conditions for using newly-constructed border villages close to the LAC for claiming sovereignty over disputed areas.
    • The import of the law is most critical for India but will affect China’s disputes with other countries too.
    • What China has done, therefore, is convert a territory dispute over borders into a sovereignty dispute which precludes any give or take of territory.
    • China will attempt to settle its Han population in the Tibetan regions, reversing established demographic patterns and at the same time.
    •  Future negotiations over territory, if they occur, will then refer to the Border Defence Cooperation Agreements of 2005 and 2012 which call for border settlements to be done keeping in mind the local population in the border regions.

    Way forward

    • A deliberate thought process needs to be evolved to offset our disadvantages as purely military actions may not solve the situation in the long term.

    Conclusion

    What emerges clearly is that by adopting the Land Boundary Law, in conjunction with its physical actions on the LAC, China has consolidated its position in eastern Ladakh and kept possibilities open in Arunachal Pradesh.

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  • China’s bridge over Pangong Tso

    China is building a bridge across the Pangong Tso area connecting the North and South Banks which will significantly reduce the time for moving troops and equipment between the two sides.

    About Pangong Tso

    • Pangong Tso or Pangong Lake is an endorheic lake in the Himalayas situated at a height of about 4,350 m.
    • It is 134 km long and extends from India to the Tibetan Autonomous Region, China.
    • Approximately 60% of the length of the lake lies within the Tibetan Autonomous Region.
    • The lake is 5 km wide at its broadest point. All together it covers 604 sq.km.
    • During winter the lake freezes completely, despite being saline water.
    • It is not a part of the Indus river basin area and is geographically a separate landlocked river basin.
    • Earlier, Pangong Tso had an outlet to Shyok River, a tributary of Indus River, but it was closed off due to natural damming.

    Tactical significance of the lake

    • It lies in the path of the Chushul approach, one of the main approaches that China can use for an offensive into Indian Territory.
    • During the 1962 war, this was where China launched its main offensive — the Indian Army fought heroically at Rezang La under Maj. Shaitan Singh.
    • Not far away, to the north of the lake, is the Army’s Dhan Singh Thapa post, named after Major Dhan Singh Thapa who was awarded the country’s highest gallantry award, the Param Vir Chakra.
    • Major Thapa and his platoon were manning the Sirijap-1 outpost which was essential for the defense of the Chushul airfield.

    Connectivity in the region

    • Over the years, the Chinese have built motorable roads along their banks of the Pangong Tso. This points to the importance accorded by the Chinese to the area.
    • Even during peacetime, the difference in perception over where the LAC lies on the northern bank of the lake makes this contested terrain.
    • In 1999, when the Army unit from the area was moved to Kargil for Operation Vijay, China took the opportunity to build 5 km of a road inside the Indian Territory along the lake’s bank.
    • From one of these roads, Chinese positions physically overlook Indian positions on the northern tip of the Pangong Tso Lake.

    What is the importance of the bridge over Pangong Tso?

    • The bridge over Pangong Tso is located around 25 kms ahead of the LAC in Chinese territory and will significantly reduce the time for movement of Chinese army.
    • The Indian Army gained tactical advantage over the PLA on the south bank in end August 2020 by occupying several peaks lying vacant since 1962 gaining a dominating view.
    • This has prompted China to build deep alternate roads behind the friction points away from the line of sight.

    How is India responding to developments on the ground?

    • The bridge is well within Chinese territory.
    • The implications of this new bridge will have to be factored in the Indian Army’s operational planning for the future.
    • On its part, over the last few years India has been focusing on infrastructure development in forward areas and improving connectivity to the forward areas.
    • Large-scale construction of roads, bridges and tunnels is underway all along the LAC.

     

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  • What America’s Indo-Pacific policy mean

    Context

    The visit by United States Secretary of State  Antony J. Blinken to Southeast Asia in December 2021 underscores the importance that is being accorded to this region by the Joe Biden administration.

    Take aways from the visit

    [1] Projecting the US as reliable partner

    • The idea was to present the U.S. as a reliable partner in meeting the challenges that the Indo-Pacific region is facing.
    • For instance, completely aware that the Southeast Asian nations are averse to choosing sides in this U.S.-China competition, Mr. Blinken made it a point to mention that “individual countries will be able to choose their own path and their own partners.

    [2] Tackling China challenge

    • Both China and the U.S. are trying to lure the Association of Southeast Asian Nation (ASEAN) countries to their side — China with its grand economic infrastructure investment deals and the U.S. through recent high profile official visits as well as through the Build Back Better World initiative and Blue Dot Network.
    • In Southeast Asia, the U.S.-China competition is most visible in two areas; one is the South China Sea and the second is the investment in fulfilling the infrastructure development needs of Southeast Asian countries.
    • The U.S. has continued its Freedom of Navigation operations in the disputed waters of the South China Sea.
    • In his remarks in Indonesia, Mr. Blinken stressed America’s determination “to ensure freedom of navigation in the South China Sea, where Beijing’s aggressive actions there threaten the movement of more than $3 trillion worth of commerce every year”.

    [3] Closing the gap on infrastructure

    • Southeast Asia has been one of the top recipients of Chinese investments under its Belt and Road Initiative (BRI).
    • How these investments have driven countries such as Cambodia and Laos to do China’s bidding in the ASEAN even at the cost of compromising ASEAN’s unity is a known fact.
    • Mr. Blinken reiterated that the U.S. remains committed to help close the gap on infrastructure.
    • The infrastructure coordination group launched by the Quad members is seeking to catalyse even more investment and is looking to partner with Southeast Asia on infrastructure and many other shared priorities.
    • Washington is promising to do more under the Build Back Better World initiative and the Blue Dot Network.

    Way forward

    • The ASEAN countries, even after the release of the ASEAN Outlook on the Indo-Pacific, do not have a uniform approach when it comes to dealing with the U.S. and China.
    • These differing approaches are also challenging the much vaunted ASEAN centrality in the Indo-Pacific.
    • Though external players will have a limited role in ensuring that the unity within ASEAN is restored, providing proper alternative models of investments for development in sectors such as infrastructure, digital economy, supply chain, and health for the Southeast Asian nations will be critical.

    Conclusion

    The economic framework, investment plans and promises outlined need to be made operational quickly if Washington is to show that it is indeed serious about sustained commitment toward the Indo-Pacific.

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  • China’s new Border Law and India

    China’s new law on land borders has come into effect on January 1.

    Key takeaways of the Border Law

    China passed the law for the “protection and exploitation of the country’s land border areas”.

    • Sacrosanct nature of Borders: Under the law, “the sovereignty and territorial integrity of China are sacred and inviolable”.
    • Border defense: It mandates the state to take measures “to strengthen border defense, support economic and social development as well as opening-up in border areas.
    • Habitation near borders: It seeks to improve public services and infrastructure in such areas, encourage and support people’s life and work there.
    • Consultations with neighbors: The law asks the state to follow the principles of equality, mutual trust, and friendly consultation, handle land border related-affairs with neighboring countries.

    Why did China bring it?

    Several factors may have led to China’s move.

    • Aggressive actions: The new law is a tool the Chinese government will use if it wants, as its actions have been aggressive even before this law.
    • Maritime assertion: This law reflects Beijing’s renewed concerns over the security of its land border while it confronts a slew of unsettled disputes on its maritime front (in the South China Sea).
    • Land boundary issues: The confrontations on the Sino-Indian borders in recent years may have reminded Beijing about this law.
    • Fear of radicalization: Afghanistan under the Taliban may become a hotbed for terrorism and extremism that could spread to Xinjiang amongst Uyghurs.
    • One-China Policy: China officially (constitutionally) claims mainland China and Taiwan as part of their respective territories. It has similar assertions for Hong Kong.

    Does it concern India?

    • No specific mention: Although the law is not meant specifically for India, it is bound to have some impact.
    • May hamper disengagement:  The date for the round meeting is still awaited, amid concerns that the Chinese delegation can use the new law to try to bolster their existing positions.
    • Possible misadventures: The new law provides for the construction of permanent infrastructure close to the border. This has been observed in Arunachal Pradesh.

    What impact can it have on India-China relations?

    • Onus on China: The view is still divided. Much depends on China’s actions, regardless of the new law.
    • Unilateral action: The new law might be the latest attempt by China to unilaterally delineate and demarcate territorial boundaries with India and Bhutan.
    • Maintain status-quo: The new law will make China dig its heels in, on the ongoing standoff as well as for the resolution of the larger boundary issue.
    • Permanent demarcation of borders: There is also a possibility that Beijing appears to be signaling a determination to resolve the border disputes on its preferred terms.

    Recent mis-adventures

    • China has been building “well-off” border defense villages across the LAC in all sectors, which the new law encourages.
    • President Xi visited a village in Tibet near the border with Arunachal Pradesh followed by renamings.
    • China has constructed a bridge in Eastern Ladakh connecting the North and South Banks of Pangong Tso.

    Conclusion

    • The law only “states the obvious” as “every country is in the business of protecting its territorial integrity.
    • The big question is what your territory is, and there we don’t agree with each other.

     

    [RSTV Archive] India-China Ties Post-Galwan

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  • Pakistan ready to host SAARC Summit

    Pakistan Foreign Minister Shah has said that his country was ready to host the 19th SAARC Summit and invited India to join it virtually if it is not willing to visit Islamabad.

    About SAARC

    • The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of states in South Asia.
    • Members: Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.
    • It was established in Dhaka on 8 December 1985. Its secretariat is based in Kathmandu, Nepal.
    • The organization promotes the development of economic and regional integration.
    • It maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union.

    Formation of SAARC

    • After the USSR invaded Afghanistan in 1979, the security situation in South Asia rapidly deteriorated.
    • In response, the foreign ministers of the initial seven members met in Colombo in 1981.
    • At the meeting, Bangladesh proposed forming a regional association that would meet to discuss matters such as security and trade.
    • While most of the countries present were in favour of the proposal, India and Pakistan were skeptical.
    • Eventually, both countries relented and in 1983 in Dhaka, joined the other five nations in signing the Declaration.

    Economic significance of SAARC

    • The SAARC comprises 3% of the world’s area, 21% of the world’s population and 4.21% (US$3.67 trillion) of the global economy, as of 2019.
    • It launched the South Asian Free Trade Area in 2006.

    Major accomplishments

    • Forum for discussions: It has provided a platform for representatives from member countries to meet and discuss important issues, something that may have been challenging through bilateral discussions.
    • Diplomatic tool: India and Pakistan for example would struggle to publicly justify a meeting when tensions between the two are particularly high, but both countries often come together under the banner of SAARC.
    • Crisis management: The bloc has also made some headway in signing agreements related to climate change, food security and combating the Covid-19 crisis.
    • Technology: It has been another avenue of cooperation marked by the launch of South Asia Satellite by India.

    Limitations to SAARC

    • Small scale: Despite its lofty ambitions, SAARC has not become a regional association in the mould of the European Union or the African Union.
    • Internal divisions: Its member states are plagued by internal divisions, most notably the conflict between India and Pakistan.
    • Trade disputes: This in turn has hampered its ability to form comprehensive trade agreements or to meaningfully collaborate on areas such as security, energy and infrastructure.
    • Terrorism: The last SAARC summit to be held in Pakistan has been cancelled several times due to many nations pulling out of the summit citing fears of regional insecurity.

    Why must India rethink on SAARC?

    • Extended diplomacy: India continued to attend Shanghai Cooperation Organisation (SCO) meetings along with their Pakistani counterparts.
    • Pandemic mitigation: Reviving SAARC is crucial to countering the common challenges brought about by the pandemic.
    • Economic cooperation: Apart from the overall GDP slowdown, global job cuts has led to fall in revenue for migrant labour and expatriates from South Asian countries.
    • Countering China: While dealing with China, a unified South Asian platform is a crucial countermeasure for India.

     

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  • Selective alignment to universal engagement of Indian diplomacy

    Context

    In 2021, Indian diplomacy was characterised by a readiness to deal with friends and foes alike.

    Challenges faced by India diplomacy in 2021

    • The US leadership change: Coping with the change from President Donald Trump to President Joe Biden and the consequent changes in U.S. policy were big enough to keep the world leaders on tenterhooks.
    • Pandemic:  With the increased onslaught of the pandemic, India suddenly became the epicentre of the tragedy.
    • The exposure of the inefficiency of India’s health system and put the country in the defensive and weakened its credibility as it tried to contribute to the resolution of global issues.
    • Aggression by China: For India, the biggest preoccupation of 2021 was the effort to get China to disengage in areas in Ladakh.
    • Dialogue, military preparedness and economic pressure met with limited success.
    • Afghanistan crisis: Afghanistan turned out to be a bigger crisis than expected, with the Taliban’s walkover in Kabul.
    • Bringing some civility to the Taliban in Kabul became a high priority in the face of a Pakistan-China-Taliban axis with some support from Russia and Iran.
    • Issue of permanent membership of the UN Security Council: Unprecedented in the history of the UN, an event at the Security Council was chaired by the Prime Minister.
    • Significant inputs were provided during discussions on issues like maritime security, peacekeeping and anti-terrorism for active consideration in the future.
    • Although it is illusory to believe that the way has been cleared for India’s permanent membership of the Security Council, India’s diplomatic capabilities and its commitment to the UN have demonstrated yet again.

    What marks the change in the style of Indian diplomacy?

    • From selective alignment, India moved to universal engagement, even to the extent of convening meetings with antagonists.
    • Engagements with the U.S. went beyond familiarisation with the new government to increased commitment to Quad and acceptance of AUKUS and formation of the ‘western Quad’, with the U.S., Israel and the UAE.
    • Engagement with Russia: Major agreements were signed with Russia, despite the American threat of CAATSA against S-400 missiles and the Russian inclination to align with China in the days to come.
    • The engagement with China at the level of commanders and diplomats was intense, and ministerial interaction continued even when China tore up many fundamental agreements that sustained the dialogue for many years.
    • Patience, diligence and firmness: India attended a Shanghai Cooperation Organisation meeting, where a sub-group led by China took its own decisions on Afghanistan.
    • We also attended a meeting of Russia, China and India.
    • Perhaps because of the unique geopolitical situation, India gave particular importance to its presidency of the UN Security Council in August 2021.
    • Engagement with Myanmar: The Foreign Secretary’s visit to Myanmar to engage the military junta at a time when opposition leaders are in prison may raise eyebrows in many countries, but this is another instance of India’s readiness to engage those in power to explore possibilities of friendship and co-operation.
    •  The intention is to prevent China from having a field day in Myanmar.

    Conclusion

    Sadly, the extraordinary efforts made by India have not been fruitful in the cases of China and Afghanistan.  But India’s new style of diplomacy will have an impact in shaping the world of the future.

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  • India, Pakistan exchange list of nuclear installations, prisoners

    India and Pakistan has exchanged a list of their nuclear installations that cannot be attacked in case of an escalation in hostilities, as part of an annual ritual that has been in practice between the two neighbours for more than three decades.

    Non-Nuclear Aggression Agreement

    • The Non-nuclear aggression agreement is a bilateral and nuclear weapons control treaty between India and Pakistan, on the reduction (or limitation) of nuclear arms.
    • Both pledged not to attack or assist foreign powers to attack on each others nuclear installations and facilities.
    • The treaty was drafted in 1988, and signed by the PM Rajiv Gandhi and his counterpart Benazir Bhutto on 21 December 1988; it entered into force on January 1991.
    • The treaty barred its signatories to carry out a surprise attack (or to assist foreign power to attack) on each other’s nuclear installations and facilities.
    • Starting in January 1992, India and Pakistan have annually exchanged lists of their respective military and civilian nuclear-related facilities.

    Need for the treaty

    • In 1986-87, the massive exercise, ‘Brasstacks’ was carried out by the Indian Army, raising the fears of an Indian attack on Pakistan’s nuclear facilities.
    • Since then, the Foreign ministries of both countries had been negotiating to reach an understanding towards the control of nuclear weapons.

    Significance of the agreement

    • The treaty barred its signatories to carry out a surprise attack (or to assist foreign power to attack) on each other’s nuclear installations and facilities.
    • The treaty provides a confidence-building security measure environment.

    Other: Sharing of Prisoners information

    • Both nations do simultaneously share the list of prisoners in each others’ custody.
    • These lists are exchanged under the provisions of the Agreement on Consular Access signed in May 2008.
    • Under this pact, the two countries should exchange comprehensive lists on January 1 and July 1 every year (i.e. twice a year).

     

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  • China issues ‘official’ names for 15 places in Arunachal Pradesh

    China’s Ministry of Civil Affairs has issued standardized names for 15 places in the Indian State of Arunachal Pradesh, to be used henceforth on official Chinese maps.

    MEA clarification

    • The Ministry of External Affairs has dismissed the Chinese “invention”.
    • Arunachal Pradesh has always been, and will always be, an integral part of India, said MEA.

    Why is China giving names to places that are in India?

    • China claims some 90,000 sq km of Arunachal Pradesh as its territory.
    • It calls the area “Zangnan” in the Chinese language and makes repeated references to “South Tibet”.
    • Chinese maps show Arunachal Pradesh as part of China, and sometimes parenthetically refer to it as “so-called Arunachal Pradesh”.
    • China makes periodic efforts to underline this unilateral claim to Indian territory.
    • Giving Chinese names to places in Arunachal Pradesh is part of that effort.

    Earlier unilateral renamings

    • This is the second lot of “standardized” names of places in Arunachal Pradesh that China has announced.
    • Earlier in 2017, it had issued “official” Chinese names for six places spanning the breadth of Arunachal Pradesh

    What is China’s argument for claiming these areas?

    • The PRC disputes the legal status of the McMahon Line, the official boundary under the ‘Convention Between Great Britain, China, and Tibet’ — of 1914 (Simla Convention).
    • China was represented at the Simla Convention by a plenipotentiary of the Republic of China, which had been declared in 1912 after the Qing dynasty was overthrown.
    • The present communist government came to power only in 1949, when the People’s Republic was proclaimed.
    • The Chinese representative did not consent to the Simla Convention, saying Tibet had no independent authority to enter into international agreements.

    What is the McMohan Line?

    • The McMohan Line, named after Henry McMahon, the chief British negotiator at Shimla, was drawn from the eastern border of Bhutan to the Isu Razi pass on the China-Myanmar border.
    • China claims territory to the south of the McMahon Line, lying in Arunachal Pradesh.
    • China also bases its claims on the historical ties that have existed between the monasteries in Tawang and Lhasa.

    Intention behind these renamings

    • This renaming is a part of the Chinese strategy to assert its territorial claims over Indian territory.
    • As part of this strategy, China routinely issues statements of outrage whenever an Indian dignitary visits Arunachal Pradesh.
    • Beijing keeps harping on its “consistent” and “clear” position that the Indian possession of Arunachal Pradesh.
    • These claims have been firmly established and recognized by the world, as “illegal”.

    Arunachal not all-alone

    • Laying aggressive claims to territories on the basis of alleged historical injustices done to China is a part of Beijing’s foreign policy playbook.
    • The claim on Taiwan is one such example, as are the consistent efforts to change the “facts on the ground” in several disputed islands in the South China Sea.
    • The aggression is at all times backed in overt and covert ways by the use of China’s economic and military muscle.

    Also read:

    [RSTV Archive] India-China Ties Post-Galwan

     

  • Taiwan: An important ally in the battle against authoritarianism

    Context

    President Joe Biden-led Summit for Democracy was held on December 9-10. The summit was driven by the idea that in the face of populism, authoritarianism it is critical to keep the “democratic” flock together.

    The salience of Summit for Democracy

    • As a goal in itself: The salience of this summit lies in a deeper understanding that democracy is not just a form of government, it is a goal in itself, a value that must be cherished, preserved and celebrated.
    • Democracy as a way of life: Unlike other political systems, democracy is also a way of life — a work in progress that needs sustained attention and careful nurturing to make it more resilient.

    Taiwan as a desired partner of like-minded democracies

    • Taiwan’s New Southbound Policy (NSP) was launched in 2016 to bring Asia closer to Taiwan and vice-versa.
    • The NSP is aimed to be a pivotal tool to engage like-minded democracies in the region.
    • Role in the post-pandemic world: The post-pandemic world would be more invested in some of these areas — for example, health diplomacy and collaboration in the medical sector, climate change mitigation, and developing sustainable and resilient supply chains.
    • Platform for semiconductor industry: Taiwan is already proving its efficacy as a viable platform for the semiconductor industry.
    • Resilient supply chain mechanism: The US and its friends in the region, particularly India, Japan and Australia, have been proactively exploring possibilities of creating resilient supply chain mechanisms.
    • With its technological knowhow, and shared interests and concerns, Taiwan fits perfectly in this agenda.
    • EU’s renewed interest in Indo-Pacific: Greater interactions between Taiwan and EU on the technology cooperation front, stimulated by the latter’s renewed interest in the Indo-Pacific region, makes Taiwan a desired partner of fellow democracies.
    •  As an industrialised democracy, Taiwan could play an important role, especially since countries are trying to reduce dependence on China and establish supply chain resilience.

    Conclusion

    It is important for liberal democracies to acknowledge that they are facing similar challenges and view Taiwan as an indispensable partner. Deft diplomacy is in order since transnational challenges demand joint efforts by liberal democracies.

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  • India-Australia soon to have FTA

    India and Australia are expected to complete negotiations for an interim free trade agreement (FTA) soon, a move aimed at boosting economic ties between the two countries.

    Comprehensive Economic Cooperation Agreement (CECA)

    • The final agreement is officially dubbed as the CECA is expected to be completed by the end of 2022.
    • The pact covers areas such as goods, services, investment, rules of origin, customs facilitation, legal and institutional issues.
    • This new strategic economic agreement is expected to increase bilateral trade in goods to $100 billion within five years.

    What is a Free Trade Agreement (FTA)?

    • A FTA is a pact between two or more nations to reduce barriers to imports and exports among them.
    • Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
    • The concept of free trade is the opposite of trade protectionism or economic isolationism.

    Key benefits offered by FTA

    • Reduction or elimination of tariffs on qualified: For example, a country that normally charges a tariff of 12% of the value of the incoming product will rationalize or eliminate that tariff.
    • Intellectual Property Protection: Protection and enforcement of intellectual property rights in the FTA partner country is upheld.
    • Product Standards: FTA enhances the ability for domestic exporters to participate in the development of product standards in the FTA partner country.
    • Fair treatment for investors: FTA provides treatment as favorably as the FTA partner country gives equal treatment for investments from the partner country.
    • Elimination of monopolies: With FTAs, global monopolies are eliminated due to increased competition.

    How many FTAs does India have?

    • India has signed it’s first Free Trade Agreement (FTA) with Sri Lanka in 1998.
    • Likewise, India had FTAs with: Nepal, Bhutan, Thailand, Singapore, ASEAN, Japan and Malaysia.
    • India has signed Preferential Trade Agreements such as:
    1. Asia Pacific Trade Agreement (APTA) with Bangladesh, China, India, Lao PDR, Republic of Korea, and Sri Lanka
    2. Global System of Trade Preferences (GSTP)
    3. India – MERCOSUR PTA etc. with South American countries

    Back2Basics: Types of Trade Agreements

    (1) Free Trade Agreement

    (discussed above)

    (2) Preferential Trade Agreement

    • In this type of agreement, two or more partners give preferential right of entry to certain products.
    • This is done by reducing duties on an agreed number of tariff lines.
    • Here a positive list is maintained i.e. the list of the products on which the two partners have agreed to provide preferential access.
    • Tariff may even be reduced to zero for some products even in a PTA.
    • India signed a PTA with Afghanistan.

    (3) Comprehensive Economic Partnership Agreement

    • Partnership agreement or cooperation agreement are more comprehensive than an FTA.
    • CECA/CEPA also looks into the regulatory aspect of trade and encompasses and agreement covering the regulatory issues.
    • CECA has the widest coverage. CEPA covers negotiation on the trade in services and investment, and other areas of economic partnership.
    • It may even consider negotiation on areas such as trade facilitation and customs cooperation, competition, and IPR.
    • India has signed CEPAs with South Korea and Japan.

    (4) Comprehensive Economic Cooperation Agreement

    • CECA generally cover negotiation on trade tariff and Tariff rate quotas (TRQs) rates only.
    • It is not as comprehensive as CEPA.
    • India has signed CECA with Malaysia.

    (5) Framework Agreement

    • Framework agreement primarily defines the scope and provisions of orientation of the potential agreement between the trading partners.
    • It provides for some new area of discussions and set the period for future liberalisation.
    • India has previously signed framework agreements with the ASEAN, Japan etc.

    (6) Early Harvest Scheme

    • An Early Harvest Scheme (EHS) is a precursor to an FTA/CECA/CEPA between two trading partners. For example, early harvest scheme of RCEP has been rolled out.
    • At this stage, the negotiating countries identify certain products for tariff liberalization pending the conclusion of actual FTA negotiations.
    • An Early Harvest Scheme is thus a step towards enhanced engagement and confidence building.

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