Comprehensive Economic and Trade Agreements (CETAs) / Free Trade Agreements (FTAs)
Indian Economy
- PYQs8
- Articles1
Background
Understanding India's trade policy, its economic integration with the world, the impact of such agreements on various sectors (manufacturing, services, agriculture), and their role in global economic governance. It's crucial for analyzing India's economic growth, employment generation, and foreign relations.
Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPAs/CETAs) are pacts between two or more countries to reduce or eliminate barriers to trade and investment. They aim to foster economic integration by liberalizing trade in goods and services, promoting investment, and addressing non-tariff barriers, often extending to areas like intellectual property, digital trade, and labor standards.
Facts & tables
- Objective
- Reduce/eliminate tariffs and non-tariff barriers on goods and services.
- Scope
- Often extend beyond goods to include services, investment, intellectual property, digital trade, and regulatory cooperation.
- Impact
- Can boost bilateral trade, attract FDI, enhance competitiveness, and integrate economies into global value chains.
- India's Strategy
- Part of India's broader trade policy to enhance market access for its exports and attract investment, aligning with initiatives like 'Atmanirbhar Bharat' and 'Make in India'.
| Type | Reference |
|---|---|
| Conceptual area | External Sector & Capital Flows |
| Conceptual area | Geopolitics & International Conflicts |
| Body | Role |
|---|---|
| Ministry of Commerce and Industry (India) | Formulates and negotiates trade agreements |
Prelims angle
Prelims angle: Multi-statement analysis
Prelims angle: Conceptual understanding
- Agreements to reduce/eliminate trade barriers (tariffs, non-tariffs).
- Cover goods, services, investment, IP, digital trade.
- Boost exports, attract FDI, integrate into global value chains.
- India's strategic tool for economic growth and global positioning.
- Example: India-U.K. CETA provides zero-duty access for 99% of Indian exports to U.K.
Treaty = agreement between states; body = institution.
| Year | Framing tags |
|---|---|
| 2026 | Cause and effect relationships, Multi-statement analysis |
| 2023 | Multi-statement analysis, Factual recall |
| 2020 | Multi-statement analysis, Conceptual understanding |
| 2018 | Factual recall, Cause and effect relationships |
| 2017 | Multi-statement analysis, Factual recall |
| 2017 | Factual recall, Terminology-based question |
| 2016 | Terminology-based question, Conceptual understanding |
| 2016 | Multi-statement analysis, Conceptual understanding |
Timeline
-
External Sector & Capital Flows
Conceptual area
-
Geopolitics & International Conflicts
Conceptual area
-
Prelims 2016
Terminology-based question, Conceptual understanding
-
Prelims 2016
Multi-statement analysis, Conceptual understanding
-
Prelims 2017
Multi-statement analysis, Factual recall
-
Prelims 2017
Factual recall, Terminology-based question
-
Prelims 2018
Factual recall, Cause and effect relationships
-
Prelims 2020
Multi-statement analysis, Conceptual understanding
-
Prelims 2023
Multi-statement analysis, Factual recall
-
Prelims 2026
Cause and effect relationships, Multi-statement analysis
-
New trade pact a win-win for India and U.K.
FTAs/CETAs are legal frameworks for economic integration, reducing trade barriers across goods, services, and investment. India uses them to boost exports, attract FDI, and enhance global competitiveness, as exemplified by the India-U.K. CETA.
See also
Past papers
2016–2026 · 8 questions
In the news
New trade pact a win-win for India and U.K.
FTAs/CETAs are legal frameworks for economic integration, reducing trade barriers across goods, services, and investment. India uses them to boost exports, attract FDI, and enhance global competitiveness, as exemplified by the India-U.K. CETA.
Try these PYQs
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.
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).
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.
India enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 in order to comply with the obligations to
The World Trade Organization (WTO) has an agreement called the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS requires member countries to protect Geographical Indications (GIs). GIs identify a product as originating from a specific geographical location where its qualities or reputation are essentially due to that origin. India enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 to comply with its obligations under the TRIPS agreement of the WTO.
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.
Show 3 more PYQs
Which of the following best describes the term “import cover”, sometimes seen in the news?
The term "import cover" refers to the number of months a country's foreign exchange reserves can finance its imports. It's a crucial indicator of a country's external trade stability and its ability to meet its import obligations.
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.
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.