FTAs not hurting domestic manufacturing: Commerce Ministry

Brushing aside concerns of Indian industry over free trade agreements (FTAs), senior commerce ministry officials today said it has not led to any spurt in imports or export of raw materials.
A Commerce Ministry's study and analysis on impact of FTAs have found that "the imports have not increased to any level that would create concerns and we have not become suppliers of raw materials. This is good part," the officials said.
However, officials did not provide any concrete data to substantiate their claims on the impact of FTAs on domestic manufacturing.
Imports of intermediate goods have increased which means that India is becoming part of the regional value chain of South Asia, they said adding Indian exporters and industry are not able to exploit these pacts fully.

"The use of these agreements by our exporters are perhaps a matter of concern. But we are making lot of efforts to disseminate informations, " the officials said.
The ministry has drawn up a strategy for the coming six months to accelerate and strengthen outreach programmes which would include workshops.

"We will also try to go down to industrial clusters where potential exporters can understand what are the benefits they have of using the preferential tariff under the FTAs. We want to them about rules of origin, sanitary and phyto-sanitary moves, technical barriers to trade," they said.
The ministry is also in the process of developing a comprehensive portal about FTAs.

"It will tell about different product regime. It will serve the purpose of promoting FTAs and helping exporters to know about tariff and non-tariff and preferential tariff regime in the partner country. That portal is for about 30 countries who are our major trade partners, including FTA partners," they added.
India has so far entered into FTAs with Japan, Singapore, South Korea, Malaysia, Asean and South Asia.
Indian industry and exporters have raised serious concerns about these pacts saying that they are benefiting partner countries more and impacting domestic manufacturing.
Citing few figures, the officials said that out of India's total overall inbound shipments, imports from ASEAN, Singapore, S Korea and Japan at preferential duty rates stood at 14.5 per cent, 10.8 per cent, 21.8 per cent and 22.4 per cent respectively.

"This clearly indicates that the preferential imports under FTAs have not contributed to the increase in trade deficits with some countries," they said adding it was difficult to collect data on exports as it have to shared by the FTA partner country.