India-Indonesia Comprehensive Economic Cooperation Agreement (CECA)

The scope of review is under consideration and was discussed in the SEOM held on 11th July, 2015 at Kuala Lumpur.

• Sri Lanka is India’s largest trading partner country in the SAARC region. The bilateral trade between India and Sri Lanka has grown four times in the last nine years increasing from US $ 658 million in 2000 to US $ 2719 million in 2009.
• The main Indian exports to Sri Lanka are Petroleum (Crude & Products), Transport Equipments, Cotton, Yarn Fabrics, Sugar, Drugs Pharmaceuticals & Fine Chemicals. The main Sri Lankan exports to India are, spices, electrical Machinery except electronic, Transport Equipments, Pulp & Waste, Natural Rubber and Paper Board.

• A JSG was set up in April, 2003 with a view to widen the ambit of ISLFTA and include Services and Investment. Report of JSG was submitted in October, 200 Based on the recommendation of the JSG, CEPA negotiations were started in February, 2005 and concluded in July 2008 after 13 rounds of negotiations. But due to reservations expressed by Government of Sri Lanka, both sides have still not signed the Agreement.
• Negotiations on Investment and Services have been resumed in December, 2010.

29th round of negations for India-Thailand CECA have been held during 15-17 June, 2015 in Bangkok, Thailand.

Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Free Trade Agreement (FTA) negotiations (as of July, 2014)

• The initiative to establish Bangladesh-India-Sri Lanka-Thailand Economic Cooperation (BIST-EC) was taken by Thailand in 1994 to explore economic cooperation on a sub regional basis involving contiguous countries of South East & South Asia grouped around the Bay of Bengal. Myanmar was admitted in December, 1997 and the initiative was renamed as BIMST-EC. The initiative involves 5 members of SAARC (India, Bangladesh Bhutan, Nepal & Sri Lanka) and 2 members of ASEAN (Thailand, Myanmar). BIMST-EC is visualized as a ‘bridging link’ between two major regional groupings i.e. ASEAN and SAARC. BIMST-EC is an important element in India’s “Look East” strategy and adds a new dimension to India’s economic cooperation with South East Asian countries. A free Trade Agreement among the member states of BIMSTEC is being negotiated.
• The 2nd BIMSTEC Summit was hosted by India in New Delhi on 13 November 2008. It was preceded by the 11th Ministerial Meeting and the 13th Senior Official’s Meeting on 11-12 November 2008. The 2nd Summit took place four years after the 1st BIMSTEC Summit which was held in Thailand.
• The Summit was attended by the Chief Adviser of the People’s Republic of Bangladesh, H.E. Fakhruddin Ahmed, the Prime Minister of the Kingdom of Bhutan, H.E. Jigmi Y Thinley, the Prime Minister of the Republic of India, H.E. Dr. Manmohan Singh, the Prime Minister of the Union of Myanmar, H.E. Thein Sein, the Prime Minister of the Republic of Nepal, H.E. Pushpa Kamal Dahal ‘Prachanda’, the President of the Democratic Socialist Republic of Sri Lanka, H.E. Mahinda Rajapaksa and the Prime Minister of the Kingdom of Thailand, H.E. Somchai Wongsawat.
• At the conclusion of the 2nd Summit, the leaders expressed satisfaction at the progress that has been made in the negotiations for a FTA in trade in goods and called for its early conclusion. The leaders welcomed the establishment of the Centre for Energy and the Centre for Weather and Climate in India and the BIMSTEC Cultural Observatory in Bhutan. They also expressed concern at the threat posed by terrorism to the region and expressed satisfaction at the finalization of the BIMSTEC Convention on Combating International Terrorism, Transnational Organized Crime and Illicit Drug Trafficking.
• The BIMSTEC Trade Negotiating Committee (TNC) has held 19 sessions of negotiations. The negotiations are spread over the areas of (i) tariff concessions on trade in goods, (ii) customs cooperation, (iii) services and (iv) investments.
• The 3rd BIMSTEC summit was held from 1 – 4 March, 2014 in Nay Pyi Taw, Myanmar. In the Summit Declaration, the Leaders directed the BIMSTEC Trade Negotiating Committee (TNC) to expedite its work for the conclusion of the Agreement on Trade in Goods by the end of 2014, and to continue its efforts for early finalisation of the Agreement on Services and Investments.

A Framework Agreement on Economic Cooperation between Republic of India and Gulf Cooperation Council was signed on 25th August, 2004. The Framework Agreement provided that both the parties shall consider ways and means for extending and liberalizing the trade relations and also for initiating discussions on the feasibility of a Free Trade Agreement between them. Accordingly, negotiations commenced with GCC. Two rounds of negotiations have been held so far in 2006 and 2008. Third round has not taken place as GCC has deferred its negotiations with all countries and economic groups and is currently reviewing its negotiations with all countries and economic groups. Efforts are being made at various bilateral/multilateral forums for early resumption of the negotiations.

• South African Customs Union (SACU) comprises of South Africa, Lesotho, Swaziland, Botswana and Namibia. So far, 5 rounds of negotiations of India-SACU PTA have been held. The 1st round of technical discussions for India-SACU PTA took place in Pretoria on 5th–6th October, 2007. The 2nd round of PTA negotiations was held at Walvis Bay, Namibia on 21-22 February, 2008 while 3rd round was held at New Delhi on 25th–27th November, 2008 During the 3rd round of negotiations, a Memorandum of Understanding (MOU), was signed on 26th November, 2008 by the representatives of India and SACU to facilitate negotiations. 4th round of negotiations was held at Pretoria on 7th – 8th October, 2009.
• The 5th round of negotiations was held during 7th – 8th October, 2010. During this round of negotiations, SACU has presented a revised text of the PTA as a working document. Further, both sides have agreed on the following:-

• The text on ‘Dispute Settlement Procedures’
• To use the text proposed by India on ‘Customs Cooperation and Trade Facilitation’ and TBT as the working text
• To use the text on ‘SPS’ proposed by SACU as the working text.

• The Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore was signed on 29th June, 2005 by the Prime Minister Mr. Manmohan Singh and H.E. Mr. Lee Hsien Loong, Prime Minister of Singapore. The CECA has become operational with effect from 1-8-2005. The details of the India-Singapore CECA are available on this web-page under the heading ‘Agreements already concluded’.
• India-Singapore CECA is reviewed from time to time. 1st Review was concluded on 1st October 2007.
• The 2nd Review of India-Singapore CECA was launched by the Commerce & Industry Minister, India on 11th May, 2010. The 1st Secretary level meeting of the 2nd Review was held in Singapore on 3rd August, 2010. Thereafter, Working Group meetings on Goods and Services & Investment were held time to time. The Chief Negotiators on both sides met at Delhi on 1-2 November, 2012 after 8 rounds of Inter-sessional meetings between the negotiating teams on both sides. Discussions are being held to sort out certain outstanding issues.

• A Framework Agreement to promote economic cooperation between India and Chile was signed on January 20, 2005 which envisaged for a Preferential Trade Agreement (PTA) between the two countries as a first step.
• The India-Chile PTA was signed on 8th March, 2006 and has become operational on September, 2007. The details of India-Chile PTA are available on this web-page under the heading ‘Agreements already concluded’.
• Expansion of the PTA – During the 1st meeting of the Joint Administrative Committee (JAC), which was held in New Delhi in February, 2009 to review the implementation of India-Chile PTA, both sides agreed to initiate the process of deepening and widening of the agreed lists of the existing India- Chile PTA. The 1st Meeting on negotiation on expansion of India-Chile PTA was held in Santiago on 28-29 January, 2010 in which both sides exchanged their wish list to each other.
• In the 2nd meeting on expansion of India-Chile PTA, which was held in August, 2010, both sides discussed the further modalities of the expansion of the PTA including exchange of initial offer lists .
• The 3rd meeting on expansion of India-Chile PTA was held in 30 June- 1 July, 2011 in Chile. During the meeting, both sides agreed on broad principle for expansion of the PTA. They also agreed to exchange new wish lists in order of priority and to hold the next meeting by November, 2011.

• MERCOSUR is a trading bloc in South America region comprising of Argentina, Brazil, Paraguay and Uruguay. It was formed in 1991 with the objective of free movement of goods, services, capital and people and became a customs union in January 1995. MERCOSUR’s role model is European Union. It is the third largest integrated market after the European Union (EU), North American Free Trade Agreement (NAFTA).
• A Framework Agreement was signed between India and MERCOSUR on 17th June 2003 at Asuncion, Paraguay to create conditions and mechanisms for negotiations by granting reciprocal tariff preferences in the first stage and, in the second stage, to negotiate a free trade area between the two parties
• As a follow up to the said Framework Agreement, a PTA between India and MERCOSUR was signed in New Delhi on January 25, 2004 and five annexes to this Agreement were signed and incorporated on March 19, 2005. The first two Annexes of the PTA relate to the list of products on which the two sides have agreed to give fixed tariff preferences to each other. The remaining three Annexes relate to the Rules of Origin, Preferential Safeguard Measures and Dispute Settlement Procedures respectively. By this PTA, India and MERCOSUR have agreed to give tariff concessions, ranging from 10% to 100% to the other side on 450 and 452 tariff lines respectively. The India-MERCOSUR PTA has become operational with effect from 1st June, 2009.
• The details of the India-MERCOSUR PTA are available on this web-page under the heading ‘Agreements already concluded’.
• Expansion of India-MERCOSUR PTA – Through IBSA Declaration made by the Heads of India, Brazil and South Africa in 2006, it was agreed that India-MERCOSUR PTA would be expanded by increasing the number of products covered and increasing the tariff concessions agreed by each side.
• The first meeting of Joint Administrative Committee (JAC) on India-MERCOSUR PTA was held in November, 2009 in Uruguay to discuss the various aspects of the implementation and expansion of the Agreement. The 2nd meeting of JAC on India-MERCOSUR PTA was held in June, 2010, in which both sides exchanged their respective wish list of additional items for expansion of the PTA and discussed the further modalities of expansion of the PTA including exchange of their initial offers lists in the matter.

• India and Pakistan have no formal trade agreement. India has granted Most Favoured Nation (MFN) Status to Pakistan, whereas Pakistan maintains a List of Importable Items from India called ‘Positive List’ which now consists of 1938 items. To see this list, please visit Government of Pakistan website http://www.commerce.gov.pk.
• Both countries have constituted a Joint Study Group (JSG) at the level of Commerce Secretary. Apart from the JSG, the issues pertaining to commercial and economic cooperation are discussed at Commerce Secretary level within the framework of the Composite Dialogue. The fourth round of dialogue was held in New Delhi on 31 July – 1 August 2007.
• Bi-lateral trade and commerce talks were held between Commerce Secretaries of India and Pakistan on 27-28 April 2011, in Islamabad. The two sides, inter-alia, agreed to improve trade infrastructure and expand trade through Attari-Wagah land route. It was agreed to set up a Working Group to address and resolve clearly identified sector-specific barriers to trade. Both sides agreed to undertake new initiatives to enable trade in electricity and Bt. Cotton seeds as also expand trade in petroleum products. It was agreed that cooperation in Information Technology sector would be encouraged through the private sector. Both sides agreed to facilitate grant of Business Visas to encourage expansion of trade. Pakistan recognized that grant of MFN status to India would help in expanding bilateral trade relations. It agreed to replace its present ‘Positive List’ with ‘Negative List’, by October 2011.
• Joint Working Groups have been set up for Customs cooperation, trade in electricity and trade in all types of Petroleum Products. A Joint Working Group on ‘Economic and Commercial Cooperation & Trade Promotion’ to be co-chaired by the Joint Secretaries of the respective Departments of Commerce has been set up for reviewing the implementation of the decisions taken during the meeting of the two Commerce Secretaries and also other trade promotion issues.
• Pakistan recognized that grant of MFN status to India would help in expanding bilateral trade relations. It has agreed to replace its present ‘Positive List’ with ‘Negative List’, by October 2011.

• On 28th June 2007, India and the EU began negotiations on a broad-based Bilateral Trade and Investment Agreement (BTIA) in Brussels, Belgium.
• These negotiations are pursuant to the commitment made by political leaders at the 7th India-EU Summit held in Helsinki on 13th October 2006 to move towards negotiations for a broad-based trade and investment agreement on the basis of the report of India-EU High Level Technical Group.
• India and the EU expect to promote bilateral trade by removing barriers to trade in goods and services and investment across all sectors of the economy. Both parties believe that a comprehensive and ambitious agreement that is consistent with WTO rules and principles would open new markets and would expand opportunities for Indian and EU businesses.
• The negotiations cover Trade in Goods, Trade in Services, Investment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade Remedies, Rules of Origin, Customs and Trade Facilitation, Competition, Trade Defence, Government Procurement, Dispute Settlement, Intellectual Property Rights & Geographical Indications, Sustainable Development. So far, 15 rounds of negotiations have been held alternately at Brussels and New Delhi. The last meeting was held in the week of 13th May, 2013 in New Delhi.

• The European Free Trade Association (EFTA) is an intergovernmental organisation for the promotion and intensification of free trade. EFTA was founded as an alternative for states that did not wish to join the European Community (EC). EFTA was founded by the Stockholm Convention on May 3, 1960 with Austria, Denmark, Great Britain, Norway, Portugal, Sweden and Switzerland as its founding members. The present membership of EFTA is limited to four countries – Switzerland, Norway, Iceland and Liechtenstein. These countries are not part of the European Union (EU).
• During the visit of our President to Iceland in May 2005, Iceland had proposed to negotiate a Free Trade Agreement (FTA) with India. Subsequently, during his meeting with the Commerce & Industry Minister (CIM) in New Delhi in January 2006, the Swiss Federal Councillor, Head of the Federal Department of Economic Affairs, proposed a possible Preferential Trading Arrangement (PTA) between India and EFTA. This request was repeated in October, 2006.

The following are the tracks on which negotiations are currently on: Trade in Goods & Services, Sanitary and Phyto-Sanitary (SPS) measures, Technical Barriers to Trade (TBT), Customs and Tariff Facilitation (TF), Investment, Intellectual Property Rights (IPRs), Competition, Government Procurement (GP), Dispute Settlement (DS), Trade Defence (TD), Rules of Origin (RoO), Sustainable Development (SD) and Legal & Horizontal. Thirteen rounds of India-EFTA BTIA negotiations have been held so far. 13th and final round was held from 25-29 November 2013 in New Delhi.

• The Agreement establishing the Global System of Trade Preferences (GSTP) among Developing countries was signed on 13th April, 1988 at Belgrade following conclusion of the First Round of Negotiations. The GSTP came into being after a long process of negotiations during the Ministerial Meeting of the Group of 77, notably at Mexico City in 1976, Arusha in 1979 and Caracas in 1981. The Ministers of Foreign Affairs of the Group of 77 in New York set up the GSTP Negotiating Committee in 198 The New Delhi Ministerial meetings, held in July 1985, gave further impetus to the GSTP negotiation process. The Brasilia Ministerial Meeting held in May 1986 launched the First Round of GSTP Negotiations. At the conclusion of the First Round in April 1988 in Belgrade, the GSTP Agreement was signed on 13 April 1988. The Agreement entered into force on 19th April 1989. Forty-four countries have ratified the Agreement and have become participants. The GSTP establishes a framework for the exchange of trade concessions among the members of the Group of 77. It lays down rules, principles and procedures for conduct of negotiations and for implementation of the results of the negotiations. The coverage of the GSTP extends to arrangements in the area of tariffs, para-tariff, non-tariff measures, direct trade measures including medium and long-term contracts and sectoral agreements. One of the basic principles of the Agreement is that it is to be negotiated step by step improved upon and extended in successive stages
• The current round of GSTP negotiations, also known as “São Paulo Round” was launched in 2004 with 22 participating countries, on the occasion of the UNCTAD XI Quadrennial Conference in Sao Paulo in Brazil. At the end of the negotiations, Ministerial Modalities were adopted on 2 December, 2009 wherein Ministers agreed to modalities based on a tariff reduction of at least 20% on at least 70% of all dutiable tariff-lines. Members who were in the process of their WTO accession namely, Algeria and Iran were to be given specific flexibilities. The modalities on market access adopted by the Ministers are as under:

• Across-the-board, line-by-line, linear cut of at least 20% on dutiable tariff lines;
• Product coverage to be at least 70% of dutiable tariff lines;
• Product coverage shall be 60% for participants having more than 50% of their national tariff lines at zero duty level;
• Tariff cuts shall be made on the MFN tariffs applicable on the date of importation. Alternatively, participants may choose to apply the cuts on the MFN tariffs applicable on the date of conclusion of the Third Round;
• The Negotiating Committee shall also consider proposal for revision of the GSTP rules of origin.

• The Asia Pacific Trade Agreement (earlier known as Bangkok Agreement) is an initiative under the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) for trade expansion through exchange of tariff concessions among developing country members of the Asia Pacific Region. China acceded to the Agreement in 2000 and the current membership of APTA consists of Bangladesh, China, India, Lao PDR, Republic of Korea and Sri Lanka.
• The Ministerial Council is the highest decision making body of APTA. The Standing Committee is the negotiating / implementing body which functions under the guidance and direction of the Ministerial Council. UN ESCAP functions as the Secretariat for the Agreement.
• Till date, three Rounds of Trade Negotiations have taken place. Upto the Third Round, India has offered tariff preferences on 570 tariff lines at an average margin of preference (MoP) of 29% and an additional 48 tariff lines to LDC members at an average MoP of 39.7% at the 6-digit HS level.
• The Second Session of the Ministerial Council, which was held in Goa in 2007, decided to launch the Fourth Round of Negotiations with the aim of both, widening and deepening the tariff concessions offered by Participating States on trade in goods and also on exploring the options to widen the scope of negotiations to other areas, such as non-tariff measures, services and investment.
• In accordance with the mandate of the Ministerial Council, the Standing Committee initiated negotiations on the following areas:

• Negotiations on tariff concessions on goods;
• Negotiations on a Framework Agreement on Trade Facilitation;
• Negotiations on a Framework Agreement on Trade in Services;
• Negotiations on a Framework Agreement on Investments; and
• Exploring possibilities on expanding the membership of APTA

Based on the recommendation of the Joint Study Group (JSG) and subsequent approval of Trade and Economic Relations Committee (TERC) headed by the then Prime Minister of India on 21.01.2010, India is negotiating with New Zealand Comprehensive Economic Cooperation Agreement (CECA) covering trade in goods, services, investment and related issues. 9 rounds of Negotiation have been held so far. The 9th Round of negotiation was held during July, 2013 at Wellington (New Zealand) followed by an intersessional discussion on 9-10th December, 2013 in New Delhi.

• In September 2008, the India-Canada CEO Round Table recommended that India and Canada would benefit enormously from CEPA by elimination of tariffs on a substantial majority of the bilateral trade. CEPA would cover trade in goods, trade in services, rules of origin, sanitary and phytosanitary measures, technical barriers to trade and other areas of economic cooperation. A Joint Study was conducted and report came in September 2010 strongly recommending the benefits of CEPA for both the countries. Accordingly, the announcement of launch of India-Canada CEPA negotiations was made by PMs of both the countries in Seoul in November 2010 and the negotiations were formally launched by CITM and Canadian Trade Minister Van Loan on 16 November 2010 in New Delhi.
• In a Joint Statement issued during the visit of Canadian PM Mr. Stephen Harper in November 2012, both the PMs have desired to conclude CEPA by the end of 201
• Eight rounds of negotiations have already taken place. The 8th Round was held in Ottawa, Canada from 24th to 26th June, 201

Based on the recommendation of the Joint Study Group (JSG) in 2010 and subsequent approval of The Trade and Economic Relations Committee (TERC) headed by the then Prime Minister of India on 29.04.2011, India is negotiating with Australia Comprehensive Economic Cooperation Agreement (CECA) covering trade in goods, services, investment and related issues. Five(5) rounds of negotiations for India Australia CECA negotiations have been held so far. The 1st round held in July, 2011 and the last i.e. 5th round was held on 20-21 May, 2013in Canberra (Australia).

Commencement of negotiations on India-Indonesia CECA was announced on 25th January, 2011 during the visit of Indonesian President to New Delhi. During the CITM’s visit to Indonesia on 3-4 October 2011, both sides held India-Indonesia CECA pre-negotiation consultations.

Joint Study on the India- COMESA (Common Market for East and Southern Africa) Joint Study Group Report to examine the feasibility of a Preferential Trade Agreement (PTA)/ Free Trade Agreement (FTA) between India and COMESA

Common Market for East and Southern Africa (COMESA) is Africa’s largest economic community comprising of 19 member states namely Burundi, Comoros, DR Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Swaziland, Sudan, Uganda, Zambia and Zimbabwe. A Joint Study Group (JSG) has been set up to examine the feasibility of a FTA between India and COMESA. The 1st meeting of the India-COMESA JSG was held in Lusaka on 30-31st July, 201 It was decided during the 1st meeting of the JSG that the India-COMESA JSG will produce a joint report, containing its recommendations for consideration by the Government of India and the COMESA Secretariat.

India and Israel are negotiating a Free Trade Agreement. First round of negotiation was held in New Delhi on 26th May, 2010. Eight Rounds have been held since. The eighth round of negotiations was held in Israel from 24th to 26th November, 201

The Regional Comprehensive Economic Partnership (RCEP) is a comprehensive free trade agreement being negotiated between the 10 ASEAN Member States and ASEAN’s free trade agreement (FTA) partners viz. Australia, China, India, Japan, Korea and New Zealand. RCEP reflects the emerging trade and economic architecture globally. It should not be seen in isolation but in the context of other comprehensive FTAs that are emerging i.e. the Trans Pacific Partnership (TPP), and the newly launched Trans-Atlantic Trade and Investment Partnership (TTIP) involving the United States and the European Union. In the context of comprehensive regional trading arrangements across the globe, TPP would cover the western flank with TTIP as the central flank and RCEP as the eastern flank. Therefore RCEP is of strategic importance for India both in the context of its look East policy and the comprehensive nature of the engagement.

Before June 2013, the RCEP process was being conducted under the ASEAN and FTA Partners Senior Economic Officials Meetings (SEOM) which has now been replaced with the RCEP Trade Negotiating Committee (RCEP-TNC) which is the apex negotiating body. The “Guiding Principles and Objectives for Negotiating RCEP”, adopted by Economic Ministers in August 2012, lays down some principles like broader and deeper engagement with significant improvements over the existing FTAs while recognizing the individual and diverse circumstances of countries; facilitate countries engagement in global and regional supply chains; taking into account the different levels of development of participating countries etc. It also identifies the areas for negotiations such as goods, services, investment, economic & technical cooperation, intellectual property, competition and dispute settlement with a flexibility to identify other areas. While three working groups i.e. Working Group on Trade in Goods (WGTIG), Working Group on Trade in Services (WGTIS) and Working Group on Investment (WGI) were set up under the AFP SEOM Consultation mechanism; three new working groups on competition, intellectual property and economic & technical cooperation (ECOTECH) were established in the 4th RCEP meeting held from 31 March-4 April, 2014 in Nanning, China. A new working group on “Legal and Institutional Issues” was set up in the 5th RCEP meeting that was held in Singapore from 21-27 June, 2014. Four sub working groups reporting to the working group on trade in goods have been established on rules of origin (ROO), customs procedures & trade facilitation (CPTF), SPS (sanitary and phytosanitary measures) and STRACAP (standards, technical regulations and conformity assessment procedures). Hence institutionally apart from the TNC, there are 7 working groups and 4 sub working groups The 6th RCEP meeting would be held from 1-5 December, 2014 in India.

Some of the key subjects that have been discussed in the working groups are tariff modalities in goods, listing of services and investment, elements of the RCEP chapters and possible texts thereof, intellectual property, competition, economic and technical cooperation, legal and institutional issues, customs procedures and trade facilitation, rules of origin etc.

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