Mid negotiations and renegotiations of a flurry of free trade agreements (FTAs), India is contemplating an FTA negotiating strategy.
Discussions to roll out a standard operating procedure (SOP) for FTA negotiations first started more than a decade ago, after India signed pacts with its key neighboring countries and was also in discussions with some developed nations to strike similar deals.
It was felt that an SOP would act like a guidance document and help in creating an institutional memory for future negotiations.
Though bureaucrats at the department of commerce held intense discussions over the next three-four years, the SOP did not see the light of the day, mainly due to lack of internal consensus.
The idea has now been revived, against the backdrop of India signing four trade pacts within a span of three years—between 2021 and 2024—with Mauritius, United Arab Emirates (UAE), Australia, and European Free Trade Association (EFTA).
India has been in discussions with at least half a dozen countries for trade and investment pacts.
That apart, there is growing importance of sustainability and issues such as government procurement, labor, and digital trade being a part of modern trade deals.
Government officials believe the need for a negotiating strategy for FTAs is crucial, considering India's past experience with South Korea and the Association of South East Asian Nations (ASEAN), where, several government officials believe India has not been a net gainer.
In fact, they say, even the recently signed trade deal with the UAE has not resulted in large gains for India.
In all these cases, India's trade deficits with these countries have widened after signing the pact, along with other challenges such as non-tariff barriers.
India also needs to be wary of the rising imports from China and whether FTAs signed by India are being used to route goods from China to India, the officials say.
This story is from the November 15, 2024 edition of Business Standard.
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This story is from the November 15, 2024 edition of Business Standard.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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