Free trade agreements can have an impact on a signatory country in many ways, depending on the breadth of the agreements, the depth and breadth of the commitments made, and national availability and capacity. The potential impact of a free trade agreement on the economy or export is subject to many reservations. Free trade agreements can only guarantee market access for appropriate quality products produced at competitive prices. Improving competitiveness at the enterprise level is a must. The government can help by guaranteeing lower tariffs on raw materials and intermediate products than on the finished products concerned. It can set up a sophisticated quality and standard infrastructure for essential products. Most countries regulate imports through such requirements and not through tariffs. The APTA is considered one of the most important trade agreements in the world, as it is the only trade agreement directly linking India and China. Other trade agreements in which India and China participate have them as observers or signatories who do not grant each other tariff preferences. Both sides believe that a comprehensive and ambitious agreement, in line with WTO rules and principles, would open up new markets and expand opportunities for Indian and European companies.
Despite the fact that the ASEAN trade agreement has contributed to a significant increase in trade with India, the problem remains that the agreement has been more beneficial to the ASEAN region than India. With the product agreement signed, domestic markets are subject to fierce competition because they have to compete with cheaper products from the ASEAN region. For example, rubber imports from Malaysia, palm oil imports from Indonesia have put a strain on local palm oil and rubber producers, especially for Kerala rubber plantations, who have complained about cheaper imports since the agreement was signed. These negotiations are in line with the commitment made by political leaders at the 7th India-EU Summit held in Helsinki on 13 October 2006 to launch negotiations on a large-scale trade and investment agreement, based on the report of the India-EU High Level Technical Group. A free trade agreement or free trade agreement is an agreement between two or more countries in which countries agree, among other things, on certain obligations that affect trade in goods and services, investor protection and intellectual property rights.