India’s Current Engagement of FTAs and PTAs

Indo-Sri Lanka Bilateral Free Trade Area (ISLFTA) and the proposal for Comprehensive Economic Partnership Agreement (CEPA)

This is the first Bilateral Free Trade Agreement signed by India

India and Sri Lanka signed the Free Trade Agreement on 28th December 1998, which became operational from March 2000.

• Objective of the agreement is to establish Free Trade Area through elimination of tariff.

• India agreed to reduce tariffs to zero on 1350 items immediately and the rest is under consideration

• 429 items were included in Negative List,

• Duty free access was offered over a period of 3 years from the date of implementation of the Agreement. 

• Tariff Related Quata (TRQ) for tea and garments agreed. 

• The 429 items in the negative list includes rubber and rubber products, coconut, alcoholic beverages, etc. 

• Sri Lanka offered 100% duty concession on 319 tariff lines, 50% tariff concession on 839 tariff lines which was later raised to 100%.  On remaining items, Sri Lanka would reduce tariffs to zero % over a 8 year period by 35%, 70% and 100%, before the expiry of 3rd, 6th, and 8th yearrespectively. 

• Sri Lanka’s negative list contains 1180 tariff lines.  

• After the meeting of the Prime Ministers in June 2002, a Joint Study Group (JSG) was set up to explore ways and means of deepening and widening economic co-operation through a Comprehensive Economic Partnership Agreement (CEPA). 

• Discussions are in progress for transforming ISLFTA into a CEPA