India needs to be engaged with the rest of the world as without that, it will be shut out of the global markets; and the country needs to have free-trade agreements (FTAs) in a balanced manner, Commerce Secretary B V R Subrahmanyam said on Wednesday. He said the World Trade Organization (WTO) has not delivered much in the past 20 years, and the industry cannot expect the multilateral system to deliver much because it has internal structural problems.
Due to this, the secretary said the world has moved into bilateral and regional arrangements.
“We are not in any regional arrangement. So, where does India go… If it wants to be a global economic player and a global trading power. We need to have FTAs.
“But, (at the) same time, we have to do it in a balanced manner, which actually allows us to be a player (that) buys enough (and) sell enough also… There will be losses, there will be gains,” he said at a CII (Confederation of Indian Industry) event.
Subrahmanyam also said that “we need to be engaged with the rest of the world. Without that, India will be shut out of the global markets, and that’s something everybody has to realise”.
Currently, India is negotiating about 20 FTAs but it is fast-tracking six of them and the others are putting slightly on the back burner, he said adding that the experience with the past FTAs of India were not lived up to their potential.
“These (FTAs which are being fast-tracked) are ones that are going to be high value addition, probably the early FTA strike will be with the UAE.
“These are economies with complete complementarities. There is one under discussion with the UK… Australians are looking for an FTA with us, negotiations are on,” he said.
Subrahmanyam added that a pact with the European Union is more complex as there are 27 countries in the EU and it is difficult for them to come to any agreement internally, so “let see how it goes”.
“A point to all the industries is that India has to engage with the rest of the world. It is important that we engage, and engage with confidence.
“If Indians can head all multi-nationals in the world, why are we worried about capabilities. We are fast-tracking some FTAs,” he said.
The secretary added that all FTAs will be looked at carefully to see that they have adequate gains, he said adding that trade and technology eat some businesses but it will also create new one and that is the way for economy to grow.
“But, we will see to it that our country as a whole is not damaged by FTAs. In the neighbourhood, we have to play a friendly role, because if we do not play a friendly role to some of our neighbours, somebody else will be friendlier with them and that something you may not like.
“We will deliver in a lot of these FTAs by the next June, a lot of them will be through. We will be opening up markets, India has lost a lot of preferences around the world like GSP (Generalized System of Preferences),” he said.
India has signed FTAs with several countries, including Japan, South Korea, Singapore, and ASEAN. Under such agreements, the trading partners significantly reduce or eliminate import duties on the maximum number of goods traded between them.
Further, he said the government wants to restructure the commerce ministry to make it future-ready.
The secretary added that the nature and functions of the commerce department have increased to a point where the systems of organising the department are no longer working.
“We need to have this backward integration into the states very, very strongly… So, we are actually going to restructure the department and you will see that by the end of December, you will actually have a very different functional set-up in this ministry, which will probably last for the next decade or so,” he said.
