India pleased with UK FTA; keen to have trade pact with US: Jaishankar

External Affairs Minister S Jaishankar on Sunday spoke of learning lessons from India’s initial free trade agreements (FTAs) with Asean nations, terming them as economies that compete with India and provide a pathway for Chinese goods to enter the Indian market.

 

He said India should focus on signing FTAs with countries having predictable economies, and which are non-competing.

 

In this context, the minister said New Delhi is pleased with the FTA it has inked with the United Kingdom (UK). He said India is keen to have FTAs with the European Union (EU) and United States (US), which have deep, sustainable, and predictable market economies, but its "red lines" should be respected. 

 

In recent years, New Delhi has revisited and reviewed its trade agreements with East Asian countries, apart from having walked out of negotiations for the Regional Comprehensive Economic Partnership (RCEP) in 2019.

 

Addressing a session at the Kautilya Economic Conclave here, Jaishankar bemoaned that the “global needle” has moved much more towards competition than cooperation with major powers tending to “weaponise almost everything.”

 

There is much less reticence among major powers to use a tool if it's at their disposal in their toolkit, he said. 

 

The minister also maintained that the Quad grouping was "alive and well", and the engagement between its bureaucrats has continued. 

 

On the India-US trade agreement, he said, “Whatever happens at the end of the day, there has got to be a trade understanding with the US.” This is not just because it is the world’s largest market, but also since much of the world has reached those understandings with the US.

 

But there has to be an understanding where India’s red lines are respected, Jaishankar said. “In any agreement, there are issues that you can negotiate and there are issues that you can’t. We are pretty clear about that. We have to find that landing ground and that is the conversation that has been going on (with the US) since March,” the minister said.

 

The External Affairs Minister spoke of the need for India to diversify its trade, but pointed out that most of New Delhi’s initial FTAs were with the Asean grouping or its individual member states.

 

But these are economies which compete with India, and the nature of their supply chains is such that they also provide a pathway to Chinese goods, he pointed out.

 

“So, I would very honestly say our focus should be on FTAs with economies that are not competitive, where there is really deep sustainable predictable and real market economy which is why we are pleased with the (FTA) with UK, which is why we are serious about the EU FTA, which is why we are striving for an understanding with the US,” he said.  

 

The minister spoke of the contradictions in the current world system emerging from a third of the world’s manufacturing shifting to one country, the US becoming not just self-sufficient in energy but an exporter and champion of fossil fuels, which has come to guide its foreign policy, while China leads in renewals.

 

He underlined the role of big technology companies and their influence, but mostly spoke of India’s concerns with the narrowness and fragility of supply chains and dependence on single markets.

 

In terms of competition for resources, the one for rare earth and critical minerals has become a major factor among nations, Jaishankar said. He added that technology controls, which many thought were a thing of the past because of globalisation, have returned.

 

He also spoke of social reactions to the mobility of workers.