Parliamentary Panel urges government to sign FTAs with US and EU nations
The government should make Free Trade Agreements (FTAs) with the United States and European Union nations as domestic exporters are at a disadvantage, the parliamentary panel has recommended in a report. Chaired by YSR Congress leader Vijaysai Reddy, the panel has also expressed concern that India’s exports contracted from 2019-20, registering a negative growth rate of (-) 15.73% in 2020.
The Committee believes India needs to step up its effort in export promotion, expand its export baskets and penetrate new export markets to recover from its current slump and increase its share in global exports. It also highlighted that Indian exporters are at a disadvantage in the US and the European markets while competing with other exporting nations due to the absence of FTAs with the United States and EU.
“The Committee recommends the Department of Commerce to iron out the issues that hindered the signing of FTAs with our leading trade partners and enter into trade agreements that are beneficial for our country while balancing the interest of the domestic market with that of our exporters,” the report said.
It expressed concern about the share of rail freight vis-à-vis road is only 35% whereas the trend is reversed in developing countries. As such, the Committee recommends the Ministry of Railways to undertake a detailed study on the reason for low share of rail and take a concerted effort to increase the share of rail in freight traffic. The panel also said it’s disheartening to note that the Ministry of Railways is unable to provide competitive freight rate for movement of export consignment. The Committee feels that this will adversely affect the competitiveness of India’s exports in global markets as freight cost plays a crucial role in determining the final price of the product.
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Moreover, the panel undertook an in-depth examination of export-oriented measures and held seven meetings with all stakeholders spanning over for nearly twenty hours. It recommended the government to take appropriate measures, relook its export strategies and policies to achieve a positive growth rate of exports and higher share in global exports markets.
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