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Synopsis: FTAs are important for boosting exports and India should try to take a step in the right direction by signing mini trade deals.
According to sources from Industries, discussions with the government regarding proposed trade deals with the United Arab Emirates (UAE) and the United Kingdom (UK) have already kicked off.
India hopes to kick-start FTA negotiations with the UK by the end of December. Recently, a joint statement by India and UK said that they agree to be ambitious in the forthcoming FTA negotiations.
As far as the UAE is concerned, India is aiming to finalize a comprehensive trade deal by December.
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However, with respect to countries such as the European Union (EU), Australia, the discussion with industry is at a premature state.
With regard to the U.S, it has indicated that it is not considering a new trade agreement with India.
How FTAs with EU, the US, Australia, and the UK will benefit India?
Make India’s exports competitive: Currently, Indian is losing out to other manufacturing competing nations like Bangladesh, who currently have a 10-12 per cent price advantage due to their concession agreement with countries such as the UK. Hence, FTAs with the EU, the US, Australia, and the UK would be a win-win situation.
What is the way forward?
According to Industry Experts, signing mini trade deals can be a good strategy to begin with, before signing a full-fledged deal. Till now, India has signed an early harvest deal with Thailand and Singapore.
Early harvest agreement can be a good strategy because first, it will help us to start the FTA in a limited way. Over a period of time, as industries give more negotiating room to the government, the list can be expanded.
Source: This post is based on the article “Govt-industry talks on proposed FTAs with EU-Australia at premature stage “published in Business Standard on 4th September 2021.