KNN India - 10 February 2024
Parliamentary Panel calls for FTA recalibration to optimise trade balances
A parliamentary panel has stressed the need for the government to recalibrate existing FTAs amidst India’s ongoing negotiations for free trade agreements (FTA) with formidable markets such as the United Kingdom (UK) and the European Union (EU).
This call aims to mitigate negative trade imbalances with partner countries and maximise the advantages offered by FTAs.
India has recently inked a limited trade deal with Australia and a comprehensive agreement with the UAE, where duties rank among the lowest globally.
Negotiations for the 14th and final round with the UK are currently in progress, anticipated to yield positive commitments. Meanwhile, talks for the seventh round with the EU are scheduled to commence on February 19.
Furthermore, India is poised to revisit its free trade agreement with ASEAN member countries, with dialogues set to commence next week. A delegation comprising approximately 50 members, including high-ranking officials from Southeast Asia, will convene in New Delhi for a three-day discussion starting February 17.
The House panel, spearheaded by Congress parliamentarian Abhishek Manu Singhvi, underscored in its report the imperative for the government to actively pursue FTAs with countries sharing high complementary interests.
Such agreements are deemed instrumental in augmenting India’s exports and fostering the growth of domestic industries.
Highlighting the detrimental impact of an inverted duty structure, the panel cautioned that it not only curtails export competitiveness but also runs counter to the government’s ’Make in India’ initiative.
Additionally, it inadvertently stimulates the import of finished goods by traders and end-use industries.
To enhance accessibility and transparency surrounding FTAs for exporters, the Parliamentary panel recommended the establishment of FTA facilitation centres, aimed at providing comprehensive information regarding all FTAs.