Commerce and Industry Minister Suresh Prabhu Friday said that two independent agencies would be appointed for preparing a template to negotiate free trade agreements (FTAs) in future. He said that the country would now have a completely new approach towards negotiating these agreements.
"We are appointing two independent agencies, who will talk to all the stakeholders...it is a first major change. This will be a new template which will emerge for all future negotiations and we are working on it," he said here at a function.
The announcement assumes significance as concerns have been raised by industry, exporters and trade experts on FTAs being implemented by India.
They say that these pacts have significantly benefited India's trading partners but not Indian industry. Several sectors, including steel, have demanded that they be removed from the purview of such agreements as these lead to dumping and significant jump in imports.
Under an FTA, two trading partners significantly reduce or eliminate import duties on majority of the goods traded between them. Besides, both countries liberalise norms to promote services trade and attract investments.
India has, so far, implemented such agreements with ASEAN and countries including Japan, South Korea, Singapore and Malaysia. Several such pacts are also under negotiations with Australia, New Zealand, European Union, Israel, and proposed 16-member Regional Economic Cooperation Partnership (RCEP).
Serious concerns have been raised on RCEP negotiations with China as one of the member nations. Several ministries, including steel and food processing, have said that the pact would result in flooding of goods from China.
The trade gap with China has increased to USD 63.12 billion in 2017-18, against USD 51.11 billion in the previous financial year. India has trade deficit with 10 RCEP member countries including with South Korea and Australia.
Prabhu said,"while we need FTAs, we make FTAs in a way that it will benefit India to begin with and also other countries. We cannot grow at the expense of India losing and, therefore, we are working on this strategy."
This would also help in promoting the country's outbound shipments, he added.
Talking about trade with the South Asia Association of Regional Cooperation (SAARC), the minister said despite the closeness of the member countries, "our export in SAARC region itself is sub-optimal".
Huge potential exists to boost exports in this region, he said, adding India is trying to work with the neighbouring countries to increase trade.
First Published: IST