Comprehensive Economic and Trade Agreement (CETA)
Indian Economy
- PYQs8
- Articles1
Background
UPSC frequently examines India's trade agreements, their strategic implications for economic growth, foreign policy, and their impact on various sectors like manufacturing, services, and MSMEs. Understanding the structure, objectives, and challenges in implementing such agreements is crucial for both Prelims and Mains.
Comprehensive Economic and Trade Agreements (CETAs) are extensive international treaties between two or more countries designed to liberalize trade in goods and services, facilitate investment, and foster deeper economic cooperation across various sectors. They go beyond traditional Free Trade Agreements by often including provisions on intellectual property rights, competition policy, sustainable development, and regulatory coherence.
Facts & tables
- Scope
- Aims to reduce tariffs and non-tariff barriers across goods, services, and investment.
- Objectives
- Promotes long-term investment, technology partnerships, innovation, and resilient supply chains.
- Key Provisions
- Often includes regulatory simplification, certification requirements, and talent mobility.
- Economic Impact
- Seeks to translate opportunities into sustained business growth and deeper economic cooperation.
| Type | Reference |
|---|---|
| Conceptual area | International Relations |
| Conceptual area | Indian Economy |
| Body | Role |
|---|---|
| Ministry of Commerce & Industry | Negotiates and implements |
Prelims angle
Prelims angle: Factual recall
Prelims angle: Terminology-based question
- Broad international treaty reducing trade barriers.
- Covers goods, services, investment, IPR, regulatory aspects.
- Aims for deeper economic integration and resilient supply chains.
- India-UK CETA is a key example.
- Negotiated by Ministry of Commerce & Industry.
| Year | Framing tags |
|---|---|
| 2026 | Cause and effect relationships, Multi-statement analysis |
| 2023 | Multi-statement analysis, Factual recall |
| 2022 | Multi-statement analysis, Policy measures |
| 2020 | Multi-statement analysis, Factual recall |
| 2020 | Multi-statement analysis, Conceptual understanding |
| 2017 | Factual recall, Terminology-based question |
| 2017 | Multi-statement analysis, Factual recall |
| 2016 | Multi-statement analysis, Conceptual understanding |
Timeline
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International Relations
Conceptual area
-
Indian Economy
Conceptual area
-
Prelims 2016
Multi-statement analysis, Conceptual understanding
-
Prelims 2017
Factual recall, Terminology-based question
-
Prelims 2017
Multi-statement analysis, Factual recall
-
Prelims 2020
Multi-statement analysis, Factual recall
-
Prelims 2020
Multi-statement analysis, Conceptual understanding
-
Prelims 2022
Multi-statement analysis, Policy measures
-
Prelims 2023
Multi-statement analysis, Factual recall
-
Prelims 2026
Cause and effect relationships, Multi-statement analysis
-
Union Ministry of Commerce and Industry Shri Piyush Goyal Urges Companies to Build on India–UK CETA Momentum Through Sustained Business Engagement
CETA is a broad international trade pact aimed at liberalizing trade, facilitating investment, and fostering comprehensive economic cooperation between signatory countries, going beyond traditional FTAs.
See also
Past papers
2016–2026 · 8 questions
In the news
Union Ministry of Commerce and Industry Shri Piyush Goyal Urges Companies to Build on India–UK CETA Momentum Through Sustained Business Engagement
CETA is a broad international trade pact aimed at liberalizing trade, facilitating investment, and fostering comprehensive economic cooperation between signatory countries, going beyond traditional FTAs.
Try these PYQs
Broad-based Trade and Investment Agreement (BTIA)’ is sometimes seen in the news in the context of negotiations held between India and
The Broad-based Trade and Investment Agreement (BTIA) is negotiated between India and the European Union (EU).
With reference to the Trade-Related Investment Measures (TRIMS), which of the following statements is/are correct?
1. Quantitative restrictions on imports by foreign investors are prohibited.
2. They apply to investment measures related to trade in both goods and services.
3. They are not concerned with the regulation of foreign investments.
Select the correct answer using the code given below:
Statement 1 is correct: The Trade-Related Investment Measures (TRIMS) agreement under the World Trade Organization (WTO) prohibits quantitative restrictions on imports by foreign investors. This means that countries cannot impose conditions like mandatory local sourcing or trade-balancing requirements that distort free trade. Statement 2 is incorrect: TRIMS only applies to trade in goods, not services. The regulation of trade in services falls under the General Agreement on Trade in Services (GATS), not TRIMS. Statement 3 is correct: TRIMS is not directly concerned with the regulation of foreign investments. Instead, it focuses on investment measures that affect trade in goods, ensuring that they do not create barriers to international trade. Hence, option C is the correct answer.
Consider the following statements:
1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
2. TFA is a part of WTO’s Bali Ministerial Package of 2013.
3. TFA came into force in January 2016.
Which of the statements given above is/are correct?
The trade facilitation decision is a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency. Statement 1 is correct. India has ratified the Trade Facilitation Agreement (TFA) of the WTO. This signifies India's official acceptance and implementation of the agreement's provisions. Statement 2 is correct. The TFA is indeed a part of the WTO's Bali Ministerial Package of 2013. This package refers to a collection of agreements reached during the Ninth Ministerial Conference of the World Trade Organization in Bali, Indonesia. The TFA was a landmark achievement within this package. Statement 3 is incorrect. The Trade Facilitation Agreement (TFA) came into force in February 2017, not January 2016. It required ratification by two-thirds of WTO members before taking effect.
Which of the following is/are the most significant implication(s) of obtaining Oeko-Tex certification for Eri Silk in the global textile industry?
1. It allows Indian exporters to compete in high-end markets that prioritise chemical-free products.
2. It confirms that Eri Silk meets international safety, environmental, and quality standards, enabling its entry into premium eco-conscious markets.
Select the answer using the code given below:
Statement 1 is Correct: The OEKO-TEX certification ensures that textiles are rigorously tested and proven free from harmful substances, heavy metals, and toxic chemicals. This certification acts as a major endorsement, directly enhancing the global marketability of Eri Silk and allowing Indian exporters to confidently compete in high-end international markets that prioritize sustainable, chemical-free, and ethically produced textiles. Statement 2 is Correct: The certification confirms that a textile meets strict international safety, environmental, and human health standards. This is highly valued by buyers in premium, eco-conscious global markets, particularly in Europe and North America. Combined with its Geographical Indication (GI) status and reputation as a cruelty-free "peace silk," the certification cements Eri Silk's position as a premium eco-friendly fabric, enabling its entry into these premium markets. Therefore, both statements are correct, making the correct option C.
With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct ?
1. They can sell their own goods in addition to offering their platforms as market-places.
2. The degree to which they can own big sellers on their platforms is limited.
Which of the above statements are correct?
Foreign e-commerce companies cannot directly sell their own goods through an inventory-based model in India. This is to ensure a level playing field for domestic sellers and protect small retailers. Marketplace model allows these companies to operate as online marketplaces, providing a platform for other sellers to list and sell their products. India amended its FDI policy in e-commerce marketplaces in 2018 to classify any vendor accounting for more than 25% of the platform’s total sales as controlled by the marketplace operator. So, no seller must exceed 25 per cent of the total business on any foreign e-commerce platform. So, statement 2 is correct. Note: UPSC officially give D as correct answer but as per us the correct answer should be B
Show 3 more PYQs
Consider the following statements:
1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.
2. “Textile and textile articles” constitute an important item of trade between India and Bangladesh.
3. In the last five years, Nepal has been the largest trading partner of India in South Asia.
Which of the statements given above is/are correct?
Statement 1 is not correct. Bilateral trade between India and Sri Lanka has increased by around 9 times between 2000-01 and 2018-19. Total trade between the two countries was US$ 6.2 billion in 2018-19, out of which India's exports to Sri Lanka were US$ 4.7 billion and imports were US$ 1.5 billion. Although India has always had a trade surplus with Sri Lanka, the gap has widened since 2008-09. In 2012-13 and 2016-17, the trade slumped, thus disturbing the steady increase in the graph. Statement 2 is correct. According to the World Bank, India exports $2.25 billion worth of textile and clothing products to Bangladesh. In turn, it imports $336 million worth of textile and clothing products from Dhaka. Statement 3 is not correct. Bangladesh is India's biggest trade partner in South Asia. Bilateral trade between India and Bangladesh has grown steadily over the last decade. India's exports to Bangladesh in FY 2018-19 stood at $9.21 billion and imports during the same period were at $1.04 billion.
Consider the following statements :
Statement-I : India accounts for 3.2% of global export of goods.
Statement-II :Many local companies and some foreign companies operating in India have taken advantage of India's 'Production-linked Incentive' scheme.
Which one of the following is correct in respect of the above statements?
* Statement I is incorrect: India's share in global merchandise trade is only 1.8% and 4% in global services. India plans to increase its export share in global trade from 2.1% to 3% by 2027 and 10% by 2047. * Statement II is correct: The PLI scheme is open to both domestic and international manufacturers. Samsung as well as Indian firms such as Dixon Technologies, UTL, Neolyncs, Lava International, Optiemus Electronics and Micromax are also expanding their factories to take advantage of the PLI scheme.
With reference to the ‘Trans-Pacific Partnership’, consider the following statements:
1. It is an agreement among all the Pacific Rim countries except China and Russia.
2. It is a strategic alliance for the purpose of maritime security only.
Which of the statements given above is/are correct?
Statement 1 is Incorrect: While China and Russia were not part of the TPP negotiations, it wasn't solely focused on Pacific Rim countries. Other economies like Vietnam and Singapore were part of the TPP despite not exactly being on the Pacific Rim. Statement 2 is Incorrect: The TPP was a proposed trade agreement, not a strategic alliance for maritime security. It aimed to reduce trade barriers and promote economic integration among member countries. The TPP negotiations were concluded in 2015, but the agreement was never ratified by all the signatories. The United States withdrew from the TPP in 2017, effectively ending the initiative in its original form. However, some member countries pursued alternative trade agreements based on the TPP framework. Hence, option D is the correct answer.