As foreign trade agreements (FTAs) proliferate and turn more complex, the department of commerce is looking to increase its capacity to deal with the challenges posed by the situation, a senior official said. The idea is to expedite the process of ironing out differences with the potential partner countries and conclude more deals.
Apart from the FTAs that are under negotiation now with the UK, European Union, Australia and Canada, South American and African countries too have put out feelers of late to New Delhi for agreements to ease two-way trade in goods and services.
Given that multilateral trade liberalisation process has slowed, India is eyeing FTAs as an efficient way to boost foreign trade and is favourably inclined to several of these proposals.
“Negotiations (on FTAs) really consume time, energy and human resource, so we are trying to increase the bandwidth within the department,” the official who did not wish to be named said.
While more human resources and outside help will aid the efforts, the experience gained in the intense negotiations on the spate of FTAs being negotiated or signed would help build capacity.
In this respect, the FTA being negotiated with the UK is most important as it is the most complex one India has attempted and will be the first comprehensive trade agreement signed with a developed country.
“We would have developed some kind of a know-how once we would have closed the FTA with the UK. A lot of clarity on the new issues which we want to deal with would have come,” the official said.
India-UK FTA includes discussions on 26 policy areas of which tariffs are just one part. Areas being negotiated include environment, labour, intellectual property rights, services and digital trade.
India has offered FTA to African countries collectively or individually. It is also planning to upgrade its existing trade agreements to broad-based FTAs. India and Gulf Cooperation Council (GCC) – which includes the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait – are also looking to negotiate a trade pact with India.
“A delegation from Latin American countries has met us and they are interested in FTAs with us. We are looking deeply into this,” the official said.
India already has a Preferential Trade Agreement (PTA) with trading bloc MERCOSUR that comprises Argentina, Brazil, Paraguay and Uruguay. India has another PTA with Chile.
“We would like to go for FTAs because it is in the interest of both sides. Broad Based FTAs reduce tariffs and non-tariff barriers and then trade grows between the two,” the official said.
Within the 10–member Association of SouthEast Asian Nations (ASEAN) India is interested in converting its existing preferential trade agreements to FTAs. “So whatever PTAs which we have done, we will be converting them into full Comprehensive Economic Partnership Agreements.
India has signed trade agreements with Asean as a bloc and with individual member states like Singapore and Thailand.
Last year commerce andindustry minister Piyush Goyal had released a report on restructuring of the department of commerce which included recommendation for capacity building of Indian Trade Service to drive specialisation and institutional memory.
Restructuring exercise included ‘Trade Promotion Body’ to drive formulation and execution of promotion strategy, digitization of trade facilitation processes and rehauling of the data analytics ecosystem.