Govt banks on FTAs, fears protectionism

India today articulated its strategy to opt for bilateral deals to boost trade in goods and services at a time when the developed countries were turning protectionists and talks for multilateral trade liberalisation were not making much headway.

While announcing amendments to the Foreign Trade Policy (2009-14) today, Commerce and Industry Minister Anand Sharma flagged the state of play in the various bilateral trade deals, something that India scoffed at in the past, that are in the pipeline. At the same time, he reiterated India’s commitment to the multilateral system.

After the Doha Round of trade liberalisation talks, which started in 2001, faced the first hurdle in 2003, India realised that it needed to push bilateral trade deals and started talks with the Association of South-East Asian Nations, or Asean. And, to speed up the process, it also entered into an early harvest scheme, a precursor to a free trade agreement, with Thailand. But the local industry cried foul, resulting in a recalibration of the entire Track II programme.

But now things seem to be back on track with India signing a bilateral trade agreement to cover goods trade with Singapore, Korea and Asean, though Malaysia, Thailand, Vietnam and Singapore have so far operationalised it.

Sharma said talks with Malaysia, Japan and the European Union were in advanced stages. Besides, negotiations on the second leg of the agreement with Asean — covering services and investments — had started.

“We are convinced that our enhanced and active engagement in international trade will contribute significantly towards realising our aspiration to become a dominant economic player,” the minister said.

There are several other trading partners, ranging from Australia and New Zealand to the Gulf Cooperation Council, Turkey and Canada, with which India has started an engagement. Besides, efforts are on to forge stronger trading relations with South Africa and Brazil.