India and free trade agreements: India's experience with SAFTA

Abstract

India has signed many FTAs in recent years. SAFTA assumes special significance for India both politically and economically. SAFTA was formed in order to increase the trade between the member countries so that the economic cooperation between them can be enhanced. India has given special concessions to the weaker member countries of SAFTA in order to encourage them to work towards the success of SAFTA. If we look India's export to SAFTA members we find that India's exports has been on increase with all member countries. The trade balance of India with member countries reveals the dominance of India in exports. India has positive trade balance with all member countries. This is one of the reasons for slow progress of SAFTA. The other countries fear India's dominance in the region and they may be thinking that the trade liberalization through SAFTA may be detrimental to their interests in the long run. Though SAFTA is aiming for more deeper integration into an RTA, it is not moving fast mainly due to this reason. It is true that there are political reasons also. An FTA or RTA to be successful, it should be beneficial for all member countries. If one country is dominant among the other member countries, it progress may be slow.