Source: The Economic Times
NEW DELHI: The government should revisit its strategy for negotiating free trade agreements as these pacts have achieved limited results in terms of increasing trade volumes, an Assocham study said.
The industry body’s comments come amid debate over the efficacy of FTAs India has signed with other nations to boost exports. The Commerce Ministry said yesterday that some concerns on the pacts were raised this week at a meeting of the Prime Minister headed panel, Trade & Economic Relations Committee.
Assocham Secretary General D S Rawat said: “These engagements have achieved limited results in terms of increasing trade volumes with member countries and thus main objective of these market opening pacts is only partially being met.”
There is an urgent need for the government to revisit its strategy of FTAs, he added.
The study by the industry body has suggested a more effective administrative process in the designing and the implementation to these free trade pacts.
It said the country has inked as many as 15 such pacts but India’s imports from these countries and regions have increased and exports have either stagnated or registered a minimal growth.
It said that foreign direct investments from FTA partners too have not recorded significant growth.
“FTAs need to be complemented with specific and time- bound commitment for inflow of investment otherwise the purpose of a trade agreement gets defeated,” Assocham said.
It added that during 2012-13, India’s exports to South Korea stood at only USD 4.2 billion, while imports were USD 13.1 billion. Similarly, the country’s shipments to Japan during the same period were USD 6.1 billion and imports, USD 12.41 billion.
“Out of the seven major trading partners – ASEAN, Indonesia, Japan, Malaysia, Singapore, South Korea and Sri Lanka with whom India has operationalised FTAs, it has trade surplus with only Sri Lanka and Singapore,” it said.
The study also suggested a special team of experts to negotiate FTAs and asked for organising outreach programmes to create awareness among various stakeholders.