Why India needs to approach its free trade agreements with an open mind

As part of its ‘Atmanirbhar Bharat’ mission, India has set itself an ambitious target to grow its exports over six times, from nearly $300 billion in 2020 to $2 trillion by 2030. The audacity of this target is fully revealed when juxtaposed with the stagnation in our exports over the last 10 years – they have hovered near the $300 billion mark since 2011.

Further, our pursuit of this target will pit India’s exporters and the enabling ecosystem much more aggressively against those of China, which have until now enjoyed an undisputed dominance in global exports. In fact, China’s signing of Free Trade Agreements (FTAs) with countries and regional blocs around the world, together with its policies like One Belt One Road (OBOR) have played a significant role in the country’s ascendancy and continuing supremacy in global trade.

However, a growing pushback from the EU and several other key markets against Chinese dominance has opened a rare window of opportunity for countries like India to step up and take share of exports away from China. Within India, a consensus is also emerging that to compete effectively with China in a pandemic-ravaged global economy, India must aggressively pursue FTAs of our own.

An article in last month’s RBI bulletin built a case for India to actively pursue free-trade agreements (FTAs) with major export destinations like the EU and the US, to bring similar tariff concessions to Indian exporters that are enjoyed by countries like Bangladesh and Cambodia. In July last year, a CRISIL report also pointed to lack of FTAs as a key reason for decline in India’s textile exports between 2011 and 2020.

Read More at https://economictimes.indiatimes.com/small-biz/trade/exports/insights/why-india-needs-to-approach-its-free-trade-agreements-with-an-open-mind/articleshow/90317715.cms