Q&A
What is an Early Harvest Scheme (EHS), and what role have they played in India’s development of Free Trade Agreements (FTAs) or Regional Trade Agreements (RTAs) with its neighbors?
What is an Early Harvest Scheme (EHS), and what role have they played in India’s development of Free Trade Agreements (FTAs) or Regional Trade Agreements (RTAs) with its neighbors?
An Early Harvest Scheme (EHS) is an agreement between two states (or regional trading blocs) which liberalizes tariffs on certain goods preceding the conclusion of a Free Trade Agreement (FTA). India is particularly fond of such EHS arrangements, and has used them in the past as a trust building measure along the path to the negotiation of an FTA. One instructive example is India’s 2003 EHS with Thailand, which paved the path to the negotiation of an FTA through its elimination of tariff duties for 83 different goods.
More recently, India and the United Kingdom have planned to commence negotiations for a Free Trade Agreement (FTA) on November 2021, with both sides targeting an Early Harvest Agreement by March 2022 to secure selective gains in goods and services. This initiative aligns with India's broader strategy to fast-track FTA discussions with other partners such as the European Union, Australia, the United Arab Emirates, and Canada.
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