India a trusted trade partner for world, multiple FTAs progressing
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India a trusted trade partner for world, multiple FTAs progressing

From not being taken seriously by countries when they first mooted free trade agreements, India now has nations looking forward to signing agreements with it, said Piyush Goyal, union minister for commerce and industry, textiles and consumer affairs, food and public distribution.

The minister said that the world had accepted India as a trading partner they could trust.

There was good progress in the FTA with UK and Canada. Similarly, he expected a deeper engagement and expansion of bilateral trade with the US. Goyal said the US commerce secretary, Gina Raimondo would lead a delegation to India on March 8.

Speaking at the Asia Economic Dialogue 2023 organised by the Pune International Centre and the Ministry of External Affairs in Pune, Goyal said as the US does not have Congressional support for getting into free trade agreements in the future, they have devised the India Pacific Economic Framework, which has been conceptualised as an alternative framework.

Though market access may not be offered yet it would enable the country to get closer to the US’ resilient supply chains, have technology partnerships and open up economies through indirect measures that go outside the realm of a free trade agreement.

The minister said the country did the fastest-ever FTA in the history of the world with the India-UAE agreement having been completed in 88 days.

“We also completed a fast FTA with Australia. That is the enthusiasm the world is demonstrating towards working with India. We have negotiations going on with Israel, Canada, the EU, the UK and GCC. Russia and its partner countries of EAU too want to fast-track negotiations with India,” he said.

About the FTA with Europe, he said there were 27 countries involved and it was much more time-consuming and EU was bureaucratic in their approach so that would take time, he said. For the agreement with Switzerland, Norway, Iceland and Liechtenstein, they were looking at settling a broad framework and handling sensitive issues such as not opening up the Indian dairy market and allowing the import of dairy products that would hurt farmers and on patents, the country could not accept anything that would restrict the Indian pharma industry.

Goyal said the government’s decision not to join the RCEP group had saved India’s manufacturing industry. The minister said the decision to become a part of RCEP was ill-conceived and a disaster in the making as it involved getting into an FTA with a non-transparent economy with no rule of law or court of appeal or democracy. “The agreement could have been the death knell of all manufacturing in India,” he said.

Goyal urged the Indian industry to wean itself away from the “opium” of low-cost low-quality Chinese imports and support domestic industry. The trade deficit with China which was under $2 billion around 15-16 years ago, increased to around $48 billion by 2014 and was now at $100 billion as the country allowed all kinds of Chinese products to come to India while China blocked the entry of Indian goods through many non-tariff barriers.

He was critical of the Indian industry that would source from China for a gain of a few cents while hurting the long-term interest of the country and urged them to be more sensitive and have some nationalist spirit.

The minister also singled out two South Korean automotive companies, Hyundai Motor India and Kia Motors for indiscriminate imports and benefitting from the trade with investments of barely half a billion dollars.

But when it came to importing steel from India, the South Korean and Japanese companies were firmly behind their domestic companies and willing to source from them at a higher cost. He urged the Indian auto industry to focus on indigenisation and strengthen domestic manufacturing capabilities.

Source : Financial Express