Towards a Free Trade Agreement the Hindu
Towards a Free Trade Agreement: Understanding India`s Position
The topic of Free Trade Agreements (FTAs) has been a subject of great debate and discussion around the world. For India, too, the question of whether to sign on to such agreements has been a matter of introspection.
A Free Trade Agreement is an international agreement in which two or more countries agree to eliminate or reduce tariffs, quotas, and other trade barriers between them. This leads to increased efficiency and productivity, as countries can focus on producing goods they are best at, and then have access to a wider range of goods at lower prices.
The benefits of FTAs are undeniable. However, there are concerns that signing on to such agreements may have a negative impact on domestic industries, especially those that are not yet fully developed. There is also the fear that smaller economies could become overly dependent on larger ones, leading to unequal relationships.
Given the above, it is understandable that India has been hesitant in signing on to FTAs. However, in recent years, there has been a growing trend towards freer trade, and India has taken steps towards this end.
In 2018, India signed an FTA with Asean, which includes countries such as Indonesia, Malaysia, Singapore, and Thailand. The agreement aims to improve economic ties and promote trade between India and the Asean region.
In addition to this, India is currently in the process of negotiating a Regional Comprehensive Economic Partnership (RCEP) with 15 other countries, including China, Japan, South Korea, and Australia. The RCEP aims to create a free trade zone covering up to 45% of the world`s population, with India being a key player in the agreement.
India`s position on FTAs is clear: it recognizes the benefits of freer trade but is also mindful of the need to protect its domestic industries. As such, the government has taken steps to ensure that its interests are protected during FTA negotiations.
One such example is the Strategic Trade Authorization (STA) agreement signed between India and the United States in 2018. The STA allows India to access certain sensitive technologies from the US, which would aid in the development of its domestic industries.
India has also insisted on reciprocity in FTAs, ensuring that its domestic industries receive fair access to markets in partner countries. In addition, it has been pushing for the inclusion of services, particularly in the RCEP negotiations, recognizing that the services sector is a key driver of India`s economy.
In conclusion, India`s position on FTAs is one of cautious optimism. While it recognizes the benefits of free trade, it is also mindful of the need to protect its domestic industries. As such, it has taken measures to ensure that its interests are protected during negotiations. It is a delicate balancing act, but one that India appears to be handling well. With the signing of more FTAs in the future, India will continue to play a key role in the global economy.