India Begins Trade Pact Talks with Philippines and Maldives: New FTAs and PTA in Focus

India has started orocess signing Terms of Reference (ToR) with the Philippines and Maldives to begin negotiations for new trade agreements. According to the Commerce Ministry this agreements will help strengthen economic relations and promote trade between the countries. Under the new initiative India will negotiate a Preferential Trade Agreement (PTA) with the Philippines and a Free Trade Agreement (FTA) with the Maldives.

India Philippines Trade Pact Terms of Reference

India and the Philippines will begin the negotiations for a Preferential Trade Agreement (PTA) under the newly signed Terms of Reference.

A preferential trade agreement generally allows two countries to reduce or eliminate import duties on selected goods traded between them.

By doing this it is making trade more affordable and competitive.

Trade relations between India and the Philippines have shown steady growth in recent years.

According to government data India’s exports to the Philippines increased by 3.11 percent to $2.16 billion in the year 2024-25.

Also the imports from the Philippines declined by 17.8 percent to $1.17 billion during the same period.

India Maldives FTA Talks: Strengthening Bilateral Trade

India has also started the negotiations for a Free Trade Agreement (FTA) with the Maldives.

Unlike a PTA an FTA usually covers a much wider range of goods and services which will allowing significant reduction or elimination of tariffs on most traded products.

This FTA also aims to simplify regulations related to trade in services, investments and economic cooperation.

As per government sources trade data shows that India’s exports to the Maldives fell by 37.11 percent to $56.88 million in 2024-25.

Also the imports from the Maldives increased by 37.14 percent to $118.82 million.

Difference Between PTA and FTA in Trade Agreements

The difference between a Preferential Trade Agreement (PTA) and a Free Trade Agreement (FTA) is important to understand the India’s trade negotiations.

A PTA allows partner countries to reduce tariffs on a limited number of goods and giving preference access to each other’s markets.

On the other hand an FTA removes or significantly reduces tariffs on a large range of goods and services and which making it a deeper and more comprehensive trade arrangement.

Question

Q. India has started negotiations for a Preferential Trade Agreement (PTA) with which country?

A. Maldives
B. Philippines
C. Singapore
D. Vietnam