Weeks after forging trade deals with the UAE and Australia, the government has decided to undertake a nation-wide outreach programme to prepare industry to take advantage of the agreements once they come into force, a senior commerce ministry official told FE.
Over the next few weeks, ministers of state and senior officials of the commerce & industry ministry and state-backed export promotion councils will huddle with senior executives of various companies as well as industry bodies and state government officials in key cities to explain what is in store for them in the two new agreements.
The first such outreach programme is planned in Hyderabad on Saturday, which will focus on benefits for the pharmaceuticals sector in particular and overall industry in general, said the official. Subsequently, another one in Bengaluru will focus on the IT-ITeS sector, he added. Similar outreach programmes will also be held in Delhi, Mumbai, Chennai, Kolkata, Ahmedabad and Agra in the first phase.
The India-UAE Comprehensive Economic Partnership Agreement will come into force on May 1, while the Economic Cooperation and Trade Agreement with Australia is expected to be in effect after election there in May.
The outreach plan comes amid growing realisation that five of India’s six FTAs (with economies like Asean group, Japan, Korea, Singapore and Malaysia), which came into force between 2006 and 2011, only accentuated its trade imbalance with them, partly due to the absence of concerted efforts by the government in sensitising exporters about the opportunities for them by these pacts. Consequently, the utilisation rate of some of these FTAs was less than even 25%.
“We don’t intend to just relax after signing the trade agreements. We want to follow up the efforts already put into making the deals by engaging extensively with our industry to let them know what kind of opportunities are opening up for them via these pacts and how they can cash on them,” said the commerce ministry official.
State government officials and apparatus are also be involved to make the whole exercise more participatory and fruitful, he added.
Both India and the UAE are aiming for a bilateral trade (both goods and services) of $100 billion in the next five years from about $60 billion in the pre-pandemic year of FY20.
According to the pact, the UAE will allow as many as 99% of Indian goods (in value term) at zero duty in five years from about 90% in the first year. Similarly, India would allow duty-free access to 80% of goods from the UAE now and it would go up to 90% in ten years. Greater access has also been granted to scores of services under this FTA.
Similarly, India and Australia target to raise their bilateral trade of goods and services to about $50 billion in five years from about $27.5 billion in 2021.
The ECTA promises preferential access to all Indian goods in five years (from 96.4% immediately after the pact comes into effect) and 85% of Australian products (from 70% to start with) to each other’s market. Indian yoga instructors, chefs, students and STEM (Science, Technology, Engineering and Mathematics) graduates will have easier access to Australia while premium wine from that country will make greater inroads into Indian supermarkets once the ECTA comes into force.
India’s labour-intensive sectors, including textiles & garments, pharmaceuticals, hospitality and gems and jewellery, and other key industries like IT and start-ups are expected to gain from both the pacts.