New Delhi, April 25 (IANS) India has struck a series of free trade agreements (FTAs) with major world economies this year and is negotiating another with the UK, Israel and Canada that would open up a plethora of economic opportunities and would create jobs not only in India but also around the world.
FTAs will further push India’s integration into the global economy as a benevolent actor creating a win-win model.
The India-UK FTA, once concluded, will be a major milestone between the world’s two major economies. During his recent visit to India, British Prime Minister Boris Johnson pushed to conclude FTA negotiations by October.
India has become one of the most important players in the global economic landscape. The country’s trade policies, various government reforms and the inherent economic strength of the Indian economy have led to its position as one of the most coveted destinations for foreign investment in the world.
Between January and October 2021, India exported goods worth $325 billion, representing a 44% year-on-year growth. FTAs have enabled Indian exporters to compete on a level playing field with local businesses from other countries due to reduced trade barriers, tariffs and duties. Through these FTAs, India plans to tap into global demand, especially in developed countries.
Trade and Industry Minister Piyush Goyal said that “India will only enter into an FTA if it is beneficial to the country. FTAs are supposed to be for two-way traffic, so India will seek reciprocal benefits and favorable market conditions with other countries. India will seek to enter into FTAs with democratic nations that share the same values as them and are conducive to the mutual growth of both countries.”
The FTA between India and Australia concluded in April and a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates in February illustrate this strategic aspect of economic partnerships. India’s merchandise exports to Australia were worth $6.9 billion and imports about $15.1 billion in 2021.
The India-Australia FTA will provide duty-free access to the bulk of India’s exports to Australia (96%), including engineering goods, gemstones and jewellery, textiles and clothing, and leather. After five years, this will be extended to 100% Indian products.
In March, New Delhi and Ontario agreed to formally relaunch negotiations on the India-Canada Comprehensive Economic Partnership Agreement (APEC). The two countries are committed to strengthening their trade and commercial ties through enhanced partnerships and cooperation in certain identified areas, such as agricultural products, chemicals, footwear, textiles, automobiles, energy, electronics, minerals and metals, urban development, information technology and tourism. . The two sides also noted the importance of the movement of professionals and skilled workers, students and business travelers in strengthening the bilateral economic partnership.
Meanwhile, India and Israel are engaged in FTA talks and aim to sign an agreement by mid-2022, as the year marks 30 years of formal diplomatic relations. Total merchandise trade between India and Israel stood at $4.67 billion in the financial year 2020-21.
India and the EU also restarted their goods and services FTA negotiations in early 2021 after an eight-year hiatus. The two regions aim to develop pacts on investments and geographical indications alongside the FTA commitment. In July 2020, India reignited talks with the SACU bloc for a preferential trade deal.
India is seeking closer manufacturing and industrial investment ties with Namibia, and its sectors of interest cover agriculture, irrigation, renewable energy, ICT, pharmaceuticals and medical supplies. Trade between India and Namibia in 2018-2019 stood at $135.92 million, with Indian exports amounting to $82.37 million and imports at $53.55 million. Namibia holds rich deposits of uranium, diamonds, phosphates and other minerals, while India’s advantage lies in its capabilities in IT, engineering, pharmaceuticals , railways, as well as in its large SME sector (small and medium-sized enterprises).
Bilateral trade between India and South Africa stood at $10.584 billion in 2018-2019. Indian exports to South Africa include automobiles and automobile components, transport equipment, drugs and pharmaceuticals, engineering goods, footwear, dyes and intermediates, chemicals, textiles , rice, gems and jewelry. South African exports to India include but, steam coal, copper ores and concentrates, phosphoric acid, manganese ore, aluminum ingots and other minerals.
In the Gulf, India had said it was seeking to sign an FTA with Oman, New Delhi’s oldest strategic partner in the region. There are said to be over 4,000 Indo-Omani joint ventures in Oman with an estimated investment of over $7.5 billion.
As geoeconomics is rapidly becoming the defining feature of the global order, economic cooperation and trade have emerged as force multipliers to strengthen bilateral ties. Being the fastest among major economies, India is increasingly channeling its fast-paced economic activities towards international trade in the spirit of globalization.
In recent times, especially when the Covid-19 pandemic has exposed uncertainties and vulnerabilities in the supply chain, not only trade but also livelihoods and economies have faced its consequences. This prompted countries in the Indo-Pacific region to launch the Supply Chain Resilience Initiative (SCRI).
At a trilateral ministerial meeting held virtually in April, trade ministers from India, Japan and Australia officially launched the SCRI, with “the achievement of strong, sustainable growth, balanced and inclusive in the region”, as one of its objectives.
SCRI will go a long way in establishing sustainable and smooth supply chains in the Indo-Pacific region.