Commerce min says all's well with FTAs.

The ministry of commerce is under pressure to review its policy of signing foreign trade agreements (FTAs) with other nations as they have been seen to be having a negative impact on trade dynamics.

At a meeting of the Trade & Economic Relations Committee recently, participants raised concerns about India’s trade engagements, especially those like India-EU BTIA, SAFTA, RCEP and Africa.

“Some were worried about the adverse impact of FTAs on the manufacturing sector as well as the trade balance and that imports from such countries had gone up much faster compared to exports subsequent to signing such FTAs which had further worsened India’s trade balance,” read a statement from the ministry of commerce and industry.

The Indian industry for long has been pushing for more safeguards from the Indian government while signing FTAs with foreign partners. The manufacturing sector, especially pharma, automobile and dairy, has remained sceptical about the reduction in import duties for foreign products under such agreements.

At the meet, however, Anand Sharma, the Union commerce and industry minister, tried to defend the FTAs by citing SAFTA, given the fact that India has a trade surplus of about $12 billion in that region.

It’s believed that finance minister P Chidambaram has taken note of the purported negative impact of the FTAs.

Sharma quoted the study conducted by the Department of Commerce that outlined that Indian exports to different regions were crucially dependent on competitiveness which was guided by other factors such as ushering in the second generation of reforms on taxation, rolling out of GST, reforms in labour laws and upgradation of infrastructure relating to power, ports and roads.

He also said ASEAN exports had more than doubled after signing of the Indo-ASEAN Trade in Goods Agreement in 2009, though imports had gone up too. Sharma mentioned that a significant part of India’s imports from this region related to essential imports like edible oils from Malaysia and Indonesia and petroleum products and coke from Indonesia which constituted $16 billion worth of trade.

The issue of a huge trade deficit with China also came up for discussion. India runs a trade deficit of $38 billion with China.

Source : dnaindia.com