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Utility of Regional Trade Agreements? Experience from India’s Regionalism

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  • Sejuti Jha

Abstract

In the last decade India’s trade policy has focussed on trade liberalization through Regional Trade Agreements (RTAs). This article poses the question whether RTAs benefit the trader, the ultimate user of such agreements. From a primary survey of Indian certifying agencies the article finds four interesting facts: (a) even though ISFTA is used mostly by Indian exporters, utilization rate for ISFTA is as low as 11 per cent; (b) SAPTA is preferred more than SAFTA, despite wider coverage of the latter; stricter Rules of Origin under SAFTA may be the reason; (c) Indian exporters export a lot to Singapore but not through the RTA, even though Singapore has given tariff-free entry to all Indian exports; low tariff preference margins, coupled with costs of proving origin, may be the reason for such low utilisation; (d) the whole gamut of RTAs has not been of much use to Indian exporters—the GSP is utilized much more (96 per cent of issued CoO) by Indian exporters than all of India’s RTAs put together

Suggested Citation

  • Sejuti Jha, 2013. "Utility of Regional Trade Agreements? Experience from India’s Regionalism," Foreign Trade Review, , vol. 48(2), pages 233-245, May.
    • Handle: RePEc:sae:fortra:v:48:y:2013:i:2:p:233-245
    DOI: 10.1177/0015732513481662
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    1. Takahashi, Katsuhide & Urata, Shujiro, 2010. "On the Use of FTAs by Japanese Firms: Further Evidence," Business and Politics, Cambridge University Press, vol. 12(1), pages 1-15, April.
    2. Suwendrani Jayaratne & Deshal De Mel & Dharshani Premaratne, 2011. "Utilization of Trade Agreements in Sri Lanka: Perceptions of Exporters vs. Statistical Measurements," Working Papers 9611, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    3. Baldwin, Richard, 2011. "21st century regionalism: Filling the gap between 21st century trade and 20th century trade rules," WTO Staff Working Papers ERSD-2011-08, World Trade Organization (WTO), Economic Research and Statistics Division.
    4. Richard Pomfret (ed.), 2003. "Economic Analysis of Regional Trading Arrangements," Books, Edward Elgar Publishing, number 2864, March.
    5. Manchin, Miriam & Pelkmans-Balaoing, Annette O., 2007. "Rules of origin and the web of East Asian free trade agreements," Policy Research Working Paper Series 4273, The World Bank.
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    Cited by:

    1. Rahul Sen & Sadhana Srivastava & Don J Webber, 2015. "Effects of preferential trade agreements in the presence of zero trade flows: the cases of China and India," Working Papers 20151507, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.

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