India Pauses FTA Talks To Reassess Trade Strategy

New Delhi, Oct 21 (KNN) In a significant shift in trade policy, India has temporarily halted negotiations on new free trade agreements (FTAs) as it reassesses its approach to international trade pacts.

This decision comes as part of a broader strategy to ensure more carefully structured agreements that better serve the country’s economic interests.

The Indian government’s move is aimed at addressing several key concerns that have emerged fr0m its existing trade partnerships.

These include preventing unintended concessions, curbing the influx of third-country goods (particularly fr0m China) through partner nations, enhancing market access for domestic industries, resisting stringent sustainability clauses, and striking a more equitable balance in trade terms.

While discussions on FTAs at early stages, such as those with Peru and Chile, have been suspended pending high-level approval, negotiations with major partners like the United Kingdom and the European Union, which are at advanced stages, continue uninterrupted.

This selective approach underscores India’s commitment to maintaining progress on strategically important trade relationships while revaluating others.

Recent data analysis by the Global Trade Research Initiative highlights the impetus behind India’s cautious stance. Over the past five years, imports fr0m FTA partners increased by 37.9 per cent to USD 187.92 billion, significantly outpacing export growth, which rose by 14.48 per cent to USD 122.72 billion.

This trade imbalance has been particularly pronounced with ASEAN countries, the UAE, Japan, and nations within the South Asian Free Trade Area (SAFTA).

The revised strategy draws on lessons fr0m past agreements, such as the challenges encountered with gold, silver, platinum, and date imports under the India-UAE FTA.

By adopting a more meticulous approach to concessions, India aims to mitigate potential risks and unforeseen consequences in future trade deals.

A key focus of the new policy is to address the issue of third-country products, especially those originating fr0m China, entering India through FTA partner countries at preferential rates.

This practice, observed notably with Indonesian and Vietnamese imports under the India-ASEAN FTA, has prompted calls for more robust rules of origin to close existing loopholes.

Additionally, India is taking a firmer stance against non-tariff barriers proposed by developed nations, particularly those related to sustainability, labour standards, and environmental regulations.

The country is also advocating for a more balanced approach in negotiations with smaller nations to ensure proportionate gains.

To refine its FTA strategy and develop standard operating procedures for trade negotiations, the Commerce Department organised a strategic planning session in May.

This event brought together officials and trade experts, including former negotiators, to brainstorm and shape India’s future approach to international trade agreements.

(KNN Bureau)

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