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India will review FTA’s, says PM

Times Of India

India will review FTA’s, says PM


30 July 2004

ON BOARD AIR INDIA: Prime Minister Manmohan Singh on Thursday made his maiden foray into the foreign policy realm by announcing a review of the various Foreign Trade Agreements (FTAs) signed by the previous BJP-led NDA government.

Talking journalists en route to Bangkok to participate in the BIMST-EC Summit, Singh said: "We are taking a hard look at all the FTAs. It will be our effort to be realistic."

As reported by The Times of India on Friday, UPA government feels that the previous government’s anxiety to counter the perception that it stood isolated in the aftermath of Cancun Trade talks led it sign FTAs without quite thinking through their implications for the domestic trade and industry.

The review resolve which saw India recently balking at formalising a FTA with Singapore has also been conveyed to Thailand.

Though the Thai government is still keen on a treaty, chances are that it may now have settle for a two-track approach with the vexed issues being separated from those which are easy to resolve.

There are 82 items on which the two sides may have what negotiators say is an Early Harvest Agreement.

One prominent casualty of the review could be the understanding reached with Bangkok which according to Indian auto manufacturers gave unfair advantage to Japanese giants who have set manufacturing facilities in Thailand with annual turnovers of $2.4 billion.

The concessions secured from India were part of Thailand’s desire to emerge as Detroit of East.

However, with Indian auto industry - from Maruti to Hyundai to TVS - protesting, these concessions could be consigned to the backburner even as two sides move ahead on issues on which agreements are easier to reach.

Talking to reporters, Prime Minister talked about the potential of BIMST-EC (Bangladesh-India-Myanmar-Sri Lanka-Thailand Economic Co-operation Summit) to be the bridge between South Asia and Asean.

He took care to point out India’s active participation in BIMST-EC was part of "Look East" approach rafted by the Narasimha Rao government, and hoped that the summit would give political direction to the process of regional cooperation.