What is a FTA?
FTA stands for Free Trade Agreement.
In simple words,
Free Trade Agreement (FTA) is an agreement between two or more countries designed to remove barriers to trade and investments thus facilitating exports and imports between the countries for mutual growth and development.
Now let's delve into it a little deeper technically.
According to Indian Trade Portal,
'FTA's are arrangements between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tarrif and non-tarrif barriers on substantial trade between them.'
In the above definition,
Tarrif barriers are in monetary form which includes duties and taxes imposed by government.
Non- Tarrif barriers are in non-monetary form which includes quotas, sanctions and embargoes.
FTAs aims to reduce or eliminate tarrif as well as non-tarrif barriers to trade and investments in one or more of below areas:
1) Trade in Goods (agriculture or industrial products, etc.)
2) Trade in Services (banking, construction or trading, etc.)
3) Intellectual Property Rights (IPRs)
4) Investments
5) Government Procurement
6) Competition Policy
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