Explanation:

• Statement 1st is correct: Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
• Statement 2nd is incorrect: The concept of free trade is the opposite of trade protectionism or economic isolationism.

India and FTAs

• After India opted out of the Regional Comprehensive Economic Partnership (RCEP) in November 2019, the 15-member FTA grouping that includes Japan, China and Australia, FTAs went into cold storage for India.
• But in May 2021 came the announcement that India-European Union talks, which had stalled in 2013, would be resumed.
• Both sides are now engaged in internal preparations to take these various strands of work forward.
• Bilateral free trade agreements of India are being negotiated with the United Arab Emirates, the United Kingdom, Australia and Canada.
• The agreement with the UAE was ‘close to finalisation’ while the FTA with Australia was at a ‘very advanced stage.’

Other Important Trade Agreements of India

• Comprehensive Economic Cooperation and Partnership Agreement (CECPA) between India and Mauritius.
• South Asia Preferential Trading Agreement (SAPTA): It is for promoting trade amongst the member countries came into effect in 1995.
• South Asian Free Trade Area (SAFTA): A Free Trade Agreement confined to goods, but excluding all services like information technology. Agreement was signed to reduce customs duties of all traded goods to zero by the year 2016.

Hence option 1st is correct.