Although India has concluded a clutch of Free Trade Agreements (FTAs) in the last decade, Indian exporters are not utilising concessions offered by these arrangements, said a senior Commerce Ministry official on Thursday.
At an interactive session on FTAs organised by the Karnataka chapter of the Confederation of Indian Industry, A.K. Tripathy, Joint Secretary, Union Ministry of Commerce and Industry, said: “With the Doha Round at the World Trade Organisation at a standstill, FTAs are the order of the day.”
Urging Indian exporters to take advantage of the tariff concessions in the ASEAN (Association of Southeast Asian Nations) region, with which India has signed an FTA, Mr. Tripathy said, “If Indian exporters do not take advantage (of FTAs), you will be priced out in these markets.”
Referring to the Comprehensive Economic Cooperation Agreement (CECA) between India and Japan, he pointed out that Japanese business entities were better at taking advantage of the treaty’s provisions than business entities in Karnataka. Japanese companies, Mr. Tripathy said, use the provisions of the CECA, which covers not just goods but services, investments and intellectual property protection, much more effectively than their Indian counterparts. He said a CECA with ASEAN was likely to be concluded this year.
Mr. Tripathy urged Indian companies to target markets in Southeast Asia more effectively because of the high non-tariff barriers in Western markets. “Technical standards such as phytosanitary restrictions, such as those on Indian mangoes, make it difficult to access Western markets,” he said.
Mr. Tripathy said India was engaged in a dialogue with Australia, ASEAN members, New Zealand, China, Japan and South Korea to establish a Regional Comprehensive Economic Partnership (RCEP). Ministers of these countries met in Brunei last month to initiate discussions to create one of the world’s biggest FTAs with a combined GDP of more than $21 trillion. “India does not have an FTA with China and the formation of such a trading bloc will imply that we have a virtual FTA with China,” he said.
Officials from the Commerce Ministry said the government was eliciting the views of exporters so that their suggestions could be incorporated when the FTAs come up for review.
