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Informist, Friday, Oct. 17, 2025

 

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--Minister Goyal: Exports hardly grew after FTAs with ASEAN, Japan, Korea 
--CONTEXT: Minister Goyal speaking at ASSOCHAM's annual meet 
--Minister Goyal: FTA with ASEAN questionable in terms of being equitable 
--Minister Goyal: Not joining RCEP saved India's manufacturing sector 
--Minister Goyal: Banks need to be more liberal about funding MSMEs 
--Minister Goyal: See banks being conservative towards funding MSMEs 
--Minister Goyal:Cos must calibrate supply chain to cut reliance on 1 nation 
--Minister Goyal: Indian cos should not be vulnerable to trade weaponisation

 

 

NEW DELHI – At a time when some countries are weaponising trade, Indian companies must recalibrate their supply chain and ensure they are not dependent on one single geography, Commerce and Industry Minister Piyush Goyal said Friday, without naming any nation. His comment comes at a time when the US has levied high tariffs on several nations and China has imposed export restrictions on critical minerals. 

 

Meanwhile, the Indian government has also changed its approach to trade negotiations, Goyal said at ASSOCHAM's 105th annual general meeting. "Gone are the days when India negotiated from a position of weakness," the minister added.

 

India is now negotiating trade deals with developed economies, which complement its manufacturing and services sector, Goyal said. Among developed economies, India is engaged in negotiations with the European Union, the US, and Australia, and has concluded deals with the UK, the European Free Trade Association, and the United Arab Emirates. 

 

In the past, India signed deals with several economies that competed against India, Goyal said, referring to trade deals with Korea, Japan, and the Association of Southeast Asian Nations. India's exports to these geographies have hardly grown after signing the respective trade deals, Goyal said. On the contrary, India's exports to the UAE surged massively after the trade pact, the minister added.

 

The free trade agreement with ASEAN is specifically questionable in terms of being equitable, Goyal said. The total trade between India and ASEAN has increased substantially since the signing of the trade deal, primarily on account of higher imports to India. India's trade deficit with ASEAN, at $45.20 billion in 2024-25 (Apr-Mar), was more than India's exports of $38.96 billion to the region. India and ASEAN, which comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, are currently engaged in negotiations to review the free trade agreement signed in 2009.

 

India's trade deficit with China would have also expanded susbtantially, if India had joined the Regional Comprehensive Economic Partnership, Goyal said, adding that the government's decision of not joining the RCEP saved the domestic manufacturers from losing business to China. RCEP includes ASEAN, China, Australia, China, Japan, Korea, and New Zealand. 

 

Goyal said banks should also rethink their approcah towards credit to the micro, small, and medium enterprises. Even with government running schemes to ease funding for MSMEs, banks are conservative about giving credit to small businesses, Goyal said. "Banks should be more liberal about funding MSMEs."  End

 

US$1 = INR 87.95

 

Reported by Krity Ambey

Edited by Tanima Banerjee

 

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