Free Trade Agreements (FTAs) and its Geoeconomic Implications
Free Trade Agreements (FTAs) and its Geoeconomic Implications

Central Idea
- With a projected 7 per cent growth for the ongoing year, the Indian economy is set to register the highest growth rate across all the major economies of the world. Moreover, Indian growth story for the years to come will be shaped by the unfolding geoeconomic and geopolitical forces that will sustain its consumption-driven-growth phenomenon, further driving investment and production.
What is Regional Trade Agreement (RTA)?
- RTA is a treaty between two or more countries in a particular region that aims to reduce or eliminate trade barriers, such as tariffs and quotas, to facilitate increased trade between the member countries.
- RTAs can take various forms, such as Free Trade Agreements, Customs Unions, Common Markets, and Economic Unions.
What is Free Trade Agreement (FTA)?
- FTA is a specific type of RTA that eliminates tariffs and other trade barriers on goods traded between the member countries.
- FTAs may also include provisions on trade in services and investment, but they are primarily focused on reducing tariffs on goods.
India’s tryst with RTAs/ FTAs
- From 2021, there has been a sudden spurt in signing bilateral trade agreements by India.
- The India-Mauritius CECPA in 2021, India-UAE CEPA and Australia-India ECTA in 2022, are some examples.
- Talks on these grounds with the UK and Canada are in advanced stages,
- Serious intentions on inking FTAs with the EU and Israel have also been expressed.
Geoeconomic Implications
- India-UAE Comprehensive Economic Partnership Agreement (CEPA):
- Western QUAD: The India-UAE CEPA strengthens Indian commitment with I2U2 (i.e. Israel, India, UAE and the United States), also referred to as the western QUAD, a regional force convened in October 2021.
- Access to the western neighbours: This agreement provides India an access to the western neighbours that can facilitate the process of negotiating trade agreements in the absence of China.
- Advantage for India-GCC FTA: It puts India a step ahead towards having an India-GCC (Gulf Cooperation Council) FTA, thereby ameliorating its relations with the gulf nations.
- Boost to economy: On the economic front, the trade pact is envisioned to almost double bilateral commodity trade by 2027, increase service trade and generate 10 lakh jobs in labour-intensive sectors.
- The Australia-India Economic Cooperation and Trade Agreement (ECTA)
- The Australia-India ECTA boosts Australia-India ties on various fronts, including geopolitical one.
- Once a more comprehensive FTA, i.e. the CECA (Comprehensive Economic Cooperation Agreement) gets inked between the two nations, various other areas such as services, investments, government procurement and intellectual property will be covered.
- Even within the QUAD, the strong relationship between Australia and India will help in creating an Australia-India niche.
- Indo-Pacific Economic Framework for Prosperity (IPEF)
- The IPEF, an economic initiative driven by the Biden administration with a total of fifteen participating member nations, presents the massive potential to ink a regional trade agreement and create a trade bloc without China.
- If that happens, India, being a member, will definitely be a beneficiary.
How FTA’s will lead to Consumption-driven growth?
- FTAs boosting consumption demand, this can happen through two avenues.
- Increase consumption choice: The FTAs will enable cheaper imports of commodities and will increase the consumption choice.
- Multiplier effect on domestic incomes: The second is that the direct multiplier effect of enhanced trade and increased employment will have its multiplier effect on domestic incomes.
- Increase purchasing power: Both the forces combined together will increase the purchasing power of the consumers, and increase consumption demand.

Factors that put India at Competitive Advantage
- India’s demographic dividend: India’s competitive advantage lies with its comparative demographic dividend over China. The under-30 population in India, being about 52 percent, compares favorably with around 40 percent for China, which is going to shrink faster over the next decade. The young population is expected to boost consumption, savings and investments, and will drive consumption-led-growth.
- Low wage and thereby Cost-competitiveness: Second, as per 2019 estimates, the average Indian wage is 10% of that of China, thereby rendering relative cost-competitiveness to the products manufactured in India as compared to China. This is already enticing foreign investment.
- National Infrastructure Pipeline: India’s massive emphasis on physical infrastructure through projects like the National Infrastructure Pipeline (NIP) for FY 2019-25 and transport sector growth will reduce the transaction costs of doing business.
- Reforms in business environment: India has been working extensively to reform its business environment through effective policy practices be it through measures like Production Linked Incentive (PLI) scheme, or bringing about substantial changes in its tax regimes, liberalization of the Foreign Direct Investment (FDI) policies in manufacturing, etc.
- Digital literacy: It entails digital literacy and English language skills. On both counts, the Indian youth is way ahead of China.
- Strong Indian Diplomacy: Indian diplomacy is also playing an important role with trade agreements being used as important instruments of diplomacy. This is true for the UAE, Australia, and the partnerships like QUAD (or even IPEF), and I2U2.
Conclusion
- No doubt, FTAs are emerging as important tools for economic diplomacy for India for deeper levels of engagement with friendly nations. At the same time, the FTAs are two-level games for India. At the international level, it has to negotiate with the concerned nation/s, while at the domestic level it has to negotiate with various contending constituencies. Yet, FTAs’ role as a growth driver through trade and investment cannot be ignored. In addition, with India becoming the most populous nation in the world, surpassing China in January 2023, it presents itself as the largest product and factor market to the global community.
India in International IP Index

India ranks 42nd among 55 leading global economies on the International IP Index released by the US Chambers of Commerce, according to which India is ripe to become a leader for emerging markets seeking to transform their economy through IP-driven innovation.
According to the report
- The report covers everything from patent and copyright laws to the ability to monetize IP assets and the ratification of international agreements.
- India has maintained continued strong efforts in copyright piracy through the issuing of “dynamic” injunction orders.
- India not only has generous R&D and IP-based tax incentives, but also has a strong awareness-raising efforts regarding the negative impact of piracy and counterfeiting.
- It is a global leader on targeted administrative incentives for the creation and use of IP assets for SMEs.
- India has taken steps to improve enforcement against copyright-infringing content and provides a best-in-class framework to promote better understanding and utilisation of IP assets.
- However, addressing long-standing gaps in its IP framework will be critical to India’s ability to create a new model for the region and India’s continued economic growth.
- However, the report said the 2021 dissolution of the Intellectual Property Appellate Board, combined with the long standing issue of an under-resourced and overstretched judiciary, raises serious concerns about rights holders’ ability to enforce their IP rights in India and to resolve IP-related disputes.
- Carriers to licensing and technology transfer, including strict registration requirements, said noting that there is limited framework for the protection of biopharmaceutical IP rights.
- Following a decade of steady, incremental, improvement in IP systems worldwide, a deluge of proposals under consideration by US and international policy leaders, including at multilateral organisations, threatens to compromise hard-won economic gains.
Third patient is cured of HIV

A 53-year-old man from Germany, referred to as the Dusseldorf patient, has become at least the third person to have been “cured of HIV” with the virus not being detectable in his body even four years after stopping the medicine. This was achieved with a bone-marrow transplant from people carrying a specific HIV-resistant genetic mutation.
Who are the people who have become HIV-free?
- Referred to as the Berlin patient, Timothy Ray Brown became the first person to overcome HIV after he underwent two stem cell transplants in 2007 and 2008 for treating his blood cancer.
- As a person with HIV, his doctors selected a donor carrying two copies of a CCR5-delta 32 genetic mutation – a mutation that is known to make the carriers almost immune to HIV. He remained HIV-free till his death due to cancer in 2020.
- Years later, researchers announced similar results in the London patient Adam Castillejo in 2019, replicating the treatment for the first time.
- The Dusseldorf patient, who also underwent a transplant for blood cancer, has remained free of HIV four years after he stopped taking antiretroviral that controls the level of the virus in the body.
What is CCR5 mutation and how does it fight off HIV?
- HIV (Human Immunodeficiency Virus) mainly attacks the CD4 immune cells in the human body, thereby reducing a person’s ability to fight off secondary infections.
- The CCR5 receptors on the surface of the CD4 immune cells act as a doorway for the HIV virus.
- However, the CCR5-delta 32 mutation prevents these receptors used by the HIV virus from forming on the surface, effectively removing the doorway.
- Only 1 per cent of the people in the world carry two copies of the CCR5-delta 32 mutation – meaning they got it from both their parents – and another 20 per cent carry one copy of the mutation, mainly those of European descent.
- Those with the mutation hence are almost immune to the infection, although some cases have been reported.
Why did the Chinese researcher who edited this gene out face backlash?
- A Chinese scientist called He Jiankui, in 2018, edited the genomes of twins Lulu and Nana to remove this CCR5 gene in an attempt to make them immune to HIV. Their father was living with HIV.
- A month after the first babies were born in October 2018, he announced that he had created the first genetically edited babies.
- He faced immediate backlash from the scientific community and legal action. This is because guidelines for genetic editing prohibit germ-line editing – editing a genome that can be passed from one generation to the other – as the editing techniques are not very precise and the long-term consequences of such editing is unknown.
- And, antiretroviral therapy could anyway have prevented mother-to-child transmission of HIV.
Vostro accounts and trade facilitation

Government officials informed that 20 Russian banks, including Rosbank, Tinkoff Bank, Centro Credit Bank and Credit Bank of Moscow have opened Special Rupee Vostro Accounts (SRVA) with partner banks in India. All major domestic banks have listed their nodal officers to sort out issues faced by exporters under the arrangement.
About the SRVA arrangement:
- A vostro account is an account that domestic banks hold for foreign banks in the former’s domestic currency, in this case, the rupee.
- Domestic banks use it to provide international banking services to their clients who have global banking needs.
- It is an integral offshoot of correspondent banking that entails a bank (or an intermediary) to facilitate wire transfer, conduct business transactions, accept deposits and gather documents on behalf of the other bank.
- It helps domestic banks gain wider access to foreign financial markets and serve international clients without having to be physically present abroad.
- The SRVA is an additional arrangement to the existing system that uses freely convertible currencies and works as a complimentary system.
How does it function?
- The framework entails three important components, namely, invoicing, exchange rate and settlement.
- Invoicing entails, all exports and imports must be denominated and invoiced in INR.
- The exchange rate between the currencies of the trading partner countries would be market-determined.
- The final settlement also takes place in Indian National Rupee (INR).
- The authorised domestic dealer banks (those authorised to deal in foreign currencies) are required to open SRVA accounts for correspondent banks of the partner trading country.
- Domestic importers are required to make payment (in INR) into the SRVA account of the correspondent bank against the invoices for supply of goods or services from the overseas seller/supplier.
- Similarly, domestic exporters are to be paid the export proceeds (in INR) from the balances in the designated account of the correspondent bank of the partner country.
- All reporting of cross-border transactions are to be done in accordance with the extant guidelines under the Foreign Exchange Management Act (FEMA), 1999.
Eligibility criterion of banks:
- Banks from partner countries are required to approach an authorised domestic dealer bank for opening the SRVA.
- The domestic bank would then seek approval from the apex banking regulator providing details of the arrangement.
- It would be the responsibility of the domestic banks to ensure that the correspondent bank is not from a country mentioned in the updated Financial Action Task Force (FATF) Public Statement on High Risk & Non-Co-operative jurisdictions.
- Domestic banks must also put forth for perusal, financial parameters pertaining to the corresponding bank.
- Authorised banks can open multiple SRV accounts for different banks from the same country.
What is its purpose?
- The Economic Survey (2022-23) had argued that the framework could largely reduce the “net demand for foreign exchange, the U.S. dollar in particular, for the settlement of current account related trade flows”.
- It added that the framework would also reduce the need for holding foreign exchange reserves and dependence on foreign currencies, making the country less vulnerable to external shocks.
- Indian exporters could get advance payments in INR from overseas clients and in the long-term promote INR as an international currency once the rupee settlement mechanism gains traction, the survey argued.
- As per the Bureau for International (BIS) Settlements’ Triennial Central Bank Survey 2022, the U.S. dollar was the most dominant vehicle currency accounting for 88% of all trades. The INR accounted for 1.6%.
China’s peace proposal for Ukraine war

One year into Russia’s war against Ukraine, China is offering a 12-point proposal to end the fighting. The proposal follows China’s recent announcement that it is trying to act as a mediator in the war that has re-energised Western alliance’s viewed by Beijing and Moscow as rivals.
What has China proposed?
- China’s proposal calls for a ceasefire and peace talks, and an end to Western sanctions against Russia.
- It says “relevant countries should stop abusing unilateral sanctions” and “do their share in de-escalating the Ukraine crisis.”
- It says sovereignty of all countries should be upheld, though it doesn’t specify what that would look like for Ukraine, and the land taken from it since Russia seized Crimea in 2014.
- The proposal condemns a “Cold War mentality,” a rebuke of the United States and NATO, the US -European military alliance.
- The security of a region should not be achieved by strengthening or expanding military blocs, the proposal says. Russian President Vladimir Putin demanded a promise that Ukraine will not join the bloc before the invasion.
- Other points call for a cease-fire, peace talks, protection for prisoners of war and stopping attacks on civilians, keeping nuclear power plants safe and facilitating grain exports.
THE Indian Council of Historical Research (ICHR)

Recently, after objections, ICHR stopped singing the daily national anthem, and removed the images of Bharat Mata and Deen Dayal Upadhyaya.
About THE INDIAN COUNCIL OF HISTORICAL RESEARCH (ICHR) :
- The Indian Council of Historical Research (ICHR) is an autonomous organization under the Ministry of Education, Government of India.
- It was established by the Ministry of Education & Social Welfare, Govt. of India (now, Ministry of Education) in 1972.
- ICHR was registered under the Societies Registration Act (Act xxi of 1860), an Act for the registration of Literary, Scientific and Charitable Societies in India.
- The primary aim and objective of the Indian Council of Historical Research are to promote and give directions to historical research and to encourage and foster objective and scientific writing of history.
- Some of the objectives of the Council:
- To foster objective and scientific writing of history such as to inculcate an informed appreciation of the country’s national and cultural heritage;
- To review the progress of historical research from time to time.
- To advise the Government of India on all such matters pertaining to historical research and training in history methodology as may be referred to it from time to time.
- To sponsor historical research programmes.
- To provide technical assistance for the formulation of historical research programmes by individuals or institutions.
- To promote publications of historical research of a high standard
- Generally, take all such measures as may be found necessary from time to time to promote historical research and its utilization in the country.
Functions:
- To provide fellowships and financial assistance to young teachers in colleges, universities and registered research organizations,
- To publish a biannual Journal – the Indian Historical Review, and another journal Itihas in Hindi.
- To maintain a large and expanding Library-cum-Documentation Centre with facilities of DELNET and J-STOR.
- To maintain two regional centres namely ICHR North-East Regional Centre (Guwahati) and ICHR Southern Regional Centre (Bangalore)