India is fast-tracking the process of forging fair and balanced free trade agreements (FTAs) with key markets to better integrate with the global supply chain and spur exports, commerce and industry minister Piyush Goyal said on Thursday.
While the government will try its best to ensure that the pacts don’t injure domestic industry, some amount of give-and-take in trade negotiations is always inevitable, he said, exhorting local players to shun parochialism of “me, my product and my company”.
While some firms seek protection from foreign competition for their finished products, they want unrestricted imports of the goods they consume. “If this becomes the attitude, then the domestic industry won’t have a bright future,” the minister said at a CII event, casting India as a reliable global supplier in the post-Covid world.
The statement comes at a time when the negotiation for an FTA with the EU is expected to resume this year after a gap of eight years. The formal talks were stuck as the EU wanted India to scrap or slash import duties on automobiles, alcoholic beverages and cheese, among others. India’s demand included greater access to the EU for its skilled professionals, which the bloc was reluctant to accede to.
Post-Brexit, India and the UK are engaged in preparatory work for launching another FTA. The EU, including the UK, was India’s largest destination (as a bloc) in FY20 (before the pandemic struck), with a 17% share in the country’s overall exports. Importantly, the UK accounted for 16% of India’s $53.7-billion exports to the EU in FY20.
Since its pull-out of the Beijing-dominated RCEP trade negotiations in November 2019, India has been seeking to clinch “balanced” trade deals with key economies.
Goyal called on the industry to take advantage of various production-linked incentive schemes to boost manufacturing and improve exports. Companies have to move out of the traditional ‘jugadoo’ attitude, he said.
The minister exhorted domestic players to raise their investments in Indian start-ups in early stages. While many foreign companies are funding our start-ups, local players perhaps remain shy; they, too, need to step up, he added.