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Secretary of Commerce Rita Teotia was highly applauded at the Delhi Dialogue last week for her firm assertion that India's Free Trade Agreements (FTAs) are not popular in the world. country. She told an audience of Indian Chambers of Commerce such as Ficci, foreign affairs experts and delegates from some Asian think tanks: "FTAs must show that they are adding jobs. They must allow our businessmen to do business with the countries with which we have signed. His statement clearly shows that FTAs do not only benefit from political support in India, the world's sixth largest economy, but with only 1.65 percent of global exports According to WTO data, they are also in extinction mode.
The seven FTAs are not considered necessary for India's expectations of doubling the size of its economy by 2025. The government plans to increase Indian exports by 302.8 billion dollars (2017-18) to $ 1 trillion over the same period, but hope to do so without sewing new trade agreements with partners.
The secretary's explosion came a few days after a press report that India and the European Union would officially announce the end of the talks to sign the FTA. India has not denied the report. Experts agree that the FTAs that India signed were based on the creation of political alliances and considered unimportant to boost India's foreign trade. Thus, politicians on the other hand treat commercial treaties more like albatrosses than as electoral dividends. The suspicion is also shared by the bureaucracy, as demonstrated by the generous support of the position of the secretary to the audience.
Indian FTAs are adrift, said Amitendu Palit, Senior Researcher and Head of Research (Trade and Economic Policy). South Asian Studies, Singapore. "Priorities are also confounded by the lack of convergence between trade objectives and foreign policy objectives In most countries, FTA negotiations start only after lengthy consultations between the Ministries of Foreign Affairs and Trade. In countries like Australia and Canada, these ministries have merged as the Department of Foreign Affairs and Trade, and a similar approach seems to be lacking in India. "
In agreement with him Former IFS official, Ashok Sajjanhar, said that India's FTAs with Bhutan, Afghanistan or even Sri Lanka were more motivated by diplomatic reasons. "But even with the ALE India-Asean (signed in 2010) that had an economic logic, the political benefits are not clear. "He said during his stint at the Ministry of Commerce, an import of high-end saris from Bangladesh is become a hot potato as representations against imports from West Bengal.
Imports had to be scuttled.
On a larger scale, this anxiety persists. This month, India has announced a series of retaliatory tariffs on US products. It has notified the WTO of its intention to impose tariffs on US imports worth about $ 240 million. The United States is India's largest trading partner. "India is not one of the largest exporters of steel and aluminum to the United States and therefore would not have been hit as hard by these tariffs as major exporters as Brazil, Korea and Japan. Incidentally, none of these countries have used retaliatory tariffs, "notes Palit. However, the Commerce Secretary said that concerns over FTAs and tariffs on US goods should not be related although both reflect the increasingly clear demonstration of India's independent trade [19659003] The agreement reached between India and Australia on the verge of concluding a free trade agreement with Australia would be politically difficult to sell.
"Free trade agreements work best when there is complementarity. offer no comment on why New Delhi had hired Canberra for aborted trade talks in the first place. Although Sajjanhar says that it was the ministry of trade that mainly pushed the FTAs, once the political past noon, the eventual negotiations ensured a shallow FTA. The CECA India-Singapore was signed in 2005 so that India escapes the repeated collapses of the stock market because of the perceived flow of hot money from Mauritius. Once this fear passed, the treaty faltered. India has exported only $ 10.2 billion to the island in 2017-18 and imported goods for $ 7.5 billion.
While the Ministry of Commerce believes that there is enough room to increase trade between India and countries trade agreements. Teotia said: "Once we signed the India-Asean Free Trade Agreement in 2010, the pressure has increased on us to be more ambitious in RCEP." The ambition is too much. high on goods and low on services ". She added that India would still be engaged in the negotiations.
Second part and conclusion of the series tomorrow
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