Commerce and industry minister Piyush Goyal on Thursday called for a nationwide drive to boost the utilisation of India’s free trade agreements (FTAs), urging states, industry bodies and export promotion councils to take the benefits of preferential market access to individual districts, MSMEs and first-time exporters.
Addressing a national workshop in New Delhi on leveraging FTAs, Goyal said India's nine FTAs currently cover economies representing about $60 trillion in GDP and provide preferential access to nearly two-thirds of global trade.
He said the upcoming trade agreements and efforts to deepen market access could eventually give India access to about 75% of global trade at rates lower than those available to competing countries.
“Ultimately, a PTA, FTA or BTA is about obtaining a rate better than that of India’s competition,” Goyal said, adding that the absolute tariff level was less important than the rate faced by competing countries.
Goyal said India should assess its tariff position against competitors such as Vietnam and Bangladesh, particularly in sectors such as textiles, where Indian exporters have historically faced higher duties in developed markets.
The minister said India had now secured rates better than those of competing geographies in almost all developed markets, leaving exporters to focus on scale, quality, timely delivery and maintaining customer trust.
“The ball is now entirely in our court,” he said.
India has set a target of $1 trillion in exports for the current year, implying a growth of about 16%, Goyal said. Exports during April-July reached about $317 billion, compared with about $280 billion in the corresponding period a year ago.
Goyal said the current trend was encouraging and exports typically accelerate as the country moves towards the Christmas period, with the final quarter generally recording the strongest performance.
India's operational FTAs include those with Mauritius, Oman, the UAE, Australia and the UK, while the agreement with the 4-nation European Free Trade Association (EFTA) is expected to become operational followed by the New Zealand agreement, according to Goyal. The European Union’s 27 countries are also expected to be covered subsequently.
He said negotiations or efforts to deepen market access were also underway with Canada, Mexico, Chile, Mercosur, the Southern African Customs Union (SACU), the Gulf Cooperation Council (GCC) and Israel, besides efforts to review India’s trade arrangements with the Association of Southeast Asian Nations (ASEAN), South Korea and Japan.
On the proposed India-US bilateral trade agreement, Goyal said the deal would be finalised once the US was able to provide India a preferential rate compared with its competitors, after which the finer details would be announced.
Goyal said all nine FTAs had secured a “good deal” for India, with sensitive sectors, including agriculture, fisheries, MSMEs and workers, protected through negotiations and stakeholder consultations.
He called for the FTA outreach programme to reach all of India's 780 districts and cover traders, entrepreneurs, startups, women entrepreneurs and small businesses.
The minister said the Department of Commerce and Department for Promotion of Industry and Internal Trade (DPIIT) would lead the effort, while other ministries, including textiles, pharmaceuticals, chemicals and electronics, would also need to be involved.
