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LATEST NEWS UPDATES | Trade pacts: India’s FTA thrust lacks clarity -Abhijit Das

Trade pacts: India’s FTA thrust lacks clarity -Abhijit Das

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published Published on Oct 21, 2022   modified Modified on Oct 25, 2022

-The Hindu

FTAs are about pursuing economic goals. They should have little to do with achieving social or geo-strategic objectives

After hurtling for many months towards finalising the India-UK FTA by Diwali, a substantial trade deal appears unlikely by this deadline. Instead of bemoaning this as a missed chance, it should be taken as an opportunity for introspecting India’s approach to FTAs, particularly with the developed countries such as the UK, European Union (EU) and Canada.

India’s FTA strategy is premised on using these agreements to secure markets for its goods and services. However, there does not appear to be adequate recognition of the reality that some of the FTA provisions could actually erode access to these markets, as well as undermine flagship initiatives of the government, particularly Atmanirbhar Bharat.

Alarm bells

No doubt, an accurate assessment of the likely impact of FTAs with the UK, EU and Canada would be possible only after the final texts of these agreements are in public domain. However, some pointers can be gleaned from the provisions in the recent FTAs of these countries. What emerges from this exercise should ring alarm bells for the government, calling for a comprehensive review of its FTA strategy.

In respect of two sectors that are likely to become drivers of economic growth in the near future — digital economy and climate-friendly products — provisions in the FTAs with the developed countries are likely to shut the doors on Atmanirbhar Bharat. Mandating almost unrestricted cross-border data flows and prohibition on localisation of servers will prevent India from leveraging its huge data advantage for creating a vibrant domestic digital economy.

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The Hindu, 21 October, 2022, https://www.thehindubusinessline.com/opinion/indias-fta-thrust-lacks-clarity/article66041539.ece


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