Govt should revisit strategy for negotiating FTA: ASSOCHAM
Updated: Nov 08, 2013 12:40:00pm
New Delhi, Nov 8 (KNN) The government should revisit its strategy for negotiating free trade agreements (FTAs) and bring more transparency in order to make FTAs more beneficial for India, said a study.
“In the aftermath of signing 15 regional and bilateral free trade agreements (FTAs), while India’s imports from these countries and regions increased significantly our exports to these partner countries either stagnated or registered minimal growth,” said a press statement issued by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) while releasing the study titled ‘Free Trade Agreements: Boon or Bane of India?’
The report came following concerns expressed within the government in a recent meeting of Trade and Economic Relations Committee, over the adverse impact of FTA on India’s manufacturing sector, getting hit by rising imports under these trade-liberalising regimes.
“India has signed as many as 15 FTAs including preferential trade pacts, while 19 are under negotiation and eight are in the pipeline but India is still grappling with slow growth of exports and sluggish foreign direct investment (FDI) flows from its FTA partners,” said secretary general of ASSOCHAM D S Rawat.
“These engagements have achieved limited results in terms of increasing trade volumes with member countries and thus the main objective of these market opening pacts is only partially being met.
“There is an urgent need for the government to revisit its strategy of FTAs, bring greater transparency and involve more effective administrative process in their design and implementation to make FTAs more beneficial for India,” he added.
According to ASSOCHAM, FTAs need to be complemented with specific and time-bound commitment for inflow of investment failing which the purpose of a trade agreement gets defeated.
It added that during 2012-13, India's exports to South Korea stood at only USD 4.2 billion, while imports were USD 13.1 billion.
Similarly, the country's shipments to Japan during the same period were USD 6.1 billion and imports, USD 12.41 billion.
"Out of the seven major trading partners - ASEAN, Indonesia, Japan, Malaysia, Singapore, South Korea and Sri Lanka with whom India has operationalized FTAs, it has trade surplus with only Sri Lanka and Singapore," it said.
The study also suggested that a special team of experts negotiate FTAs and that outreach programmes be organised to create awareness among various stakeholders.
As the feasibility and joint studies conducted by the government before commencing talks for any FTA form the basis of negotiations, ASSOCHAM has also suggested for broadening the base of such studies and inviting participation from various stakeholders like academicians, representatives of the marginal, small and medium enterprises (MSMEs) and state government officials. Besides, Indian embassies in these countries should also be engaged to gather sensitive information while conducting such studies.
However, the Commerce Ministry said in a notification quoting the Minister in charge Anand Sharma that India's exports gained from the regional and bilateral free trade pacts. (KNN/SD)
“In the aftermath of signing 15 regional and bilateral free trade agreements (FTAs), while India’s imports from these countries and regions increased significantly our exports to these partner countries either stagnated or registered minimal growth,” said a press statement issued by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) while releasing the study titled ‘Free Trade Agreements: Boon or Bane of India?’
The report came following concerns expressed within the government in a recent meeting of Trade and Economic Relations Committee, over the adverse impact of FTA on India’s manufacturing sector, getting hit by rising imports under these trade-liberalising regimes.
“India has signed as many as 15 FTAs including preferential trade pacts, while 19 are under negotiation and eight are in the pipeline but India is still grappling with slow growth of exports and sluggish foreign direct investment (FDI) flows from its FTA partners,” said secretary general of ASSOCHAM D S Rawat.
“These engagements have achieved limited results in terms of increasing trade volumes with member countries and thus the main objective of these market opening pacts is only partially being met.
“There is an urgent need for the government to revisit its strategy of FTAs, bring greater transparency and involve more effective administrative process in their design and implementation to make FTAs more beneficial for India,” he added.
According to ASSOCHAM, FTAs need to be complemented with specific and time-bound commitment for inflow of investment failing which the purpose of a trade agreement gets defeated.
It added that during 2012-13, India's exports to South Korea stood at only USD 4.2 billion, while imports were USD 13.1 billion.
Similarly, the country's shipments to Japan during the same period were USD 6.1 billion and imports, USD 12.41 billion.
"Out of the seven major trading partners - ASEAN, Indonesia, Japan, Malaysia, Singapore, South Korea and Sri Lanka with whom India has operationalized FTAs, it has trade surplus with only Sri Lanka and Singapore," it said.
The study also suggested that a special team of experts negotiate FTAs and that outreach programmes be organised to create awareness among various stakeholders.
As the feasibility and joint studies conducted by the government before commencing talks for any FTA form the basis of negotiations, ASSOCHAM has also suggested for broadening the base of such studies and inviting participation from various stakeholders like academicians, representatives of the marginal, small and medium enterprises (MSMEs) and state government officials. Besides, Indian embassies in these countries should also be engaged to gather sensitive information while conducting such studies.
However, the Commerce Ministry said in a notification quoting the Minister in charge Anand Sharma that India's exports gained from the regional and bilateral free trade pacts. (KNN/SD)
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