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Informist, Monday, Sept. 30, 2024

 

By Krity Ambey and Sagar Sen

 

NEW DELHI – The commerce ministry has mooted a comprehensive standard operating procedure to navigate through negotiations for trade agreements, to secure more favourable deals, an official said. The ministry hopes to get the Cabinet's approval for the strategy in the next two months, after which it may launch discussions for free trade agreements with several regions, the official added. 

 

The new strategy emphasises a balanced negotiation pace, neither too fast nor too slow, the official told Informist. It entails intensive consultation with stakeholders, and extensive research by in-house departments in the ministry, as well as other agencies like Research and Information System for Developing Countries, Exim Bank of India, and Federation of Indian Export Organisations, as per the official.

 

"It will give a step-by-step guide on FTA negotiations: the kind of homework that is to be done before the talks, nothing should be hurried, more involvement of stakeholders and research organisations," the official said.

 

Alarmed by the contraction in India's merchandise exports for the first time in three years in 2023-24 (Apr-Mar), the commerce ministry had hosted a series of brainstorming sessions in April and May to reassess the country's trade landscape amid global economic shifts. The government had decided to prepare a new strategy for trade talks at one of those sessions.

 

The envisaged strategy adopts a multidimensional approach that will focus not only on finding avenues to boost merchandise exports, but also encourage services exports, the official said. "We have also incorporated mechanisms to address non-tariff barriers under the strategy."

 

"There has been a larger revisit in the entire FTA strategy of the country," the official said. "Previous FTAs happened at a very fast pace, because of which they did not turn out fruitful." 

 

India negotiated FTAs with the Association of Southeast Asian Nations, Korea, and Japan, in the late 2000s, after which India's trade deficit with the region expanded significantly. India's trade deficit with ASEAN has widened almost eight-fold to $38.46 billion in FY24 from FY11 when the trade pact was signed.

 

Similarly, India's trade deficit with Korea has more than doubled in FY24 from 2010-11. While India's imports from both Korea, and ASEAN, have increased twofold since the signing of the trade deal, exports have not grown by more than 70%.

 

"Because of our past experience (in FTA negotiations), we want backing from the very top so that we can form a vision for the next few years," the official said. India is pursuing a review of its trade pacts with ASEAN, Korea, and Japan. "The discussions for the review of these FTAs would also follow the process laid out in the new SOP," the official said. "The SOP also entails a regular review exercise for future agreements." 

 

India and ASEAN last year started discussions for the review of the trade deal signed over a decade ago, and have held five rounds so far. India is yet to start negotiations for the review of the trade agreements with Korea and Japan. The government is also in discussions with the UK, the European Union, Oman, Peru, and Australia for free trade agreements.  End

 

US$1 = 83.79 rupees

 

Edited by Akul Nishant Akhoury

 

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