19/09/2019 - International Relations

KEY POINTS

·        India signed a series of Free Trade Agreements (FTA) in Asia that came into force in the 2000s.

·        The success of an FTA should be judged against its objective of enhancing trade. If the proportion (and not just absolute level) of both imports and exports between the countries concerned has grown, then an FTA is successful for both parties.

FTAs ineffective for India

·        Overall, our FTAs have had little effect on our trade flows: Accounting for 16.3 per cent of our trade in 2000 and 17.9 per cent of it today.

·        India is not the only country signing FTAs. ASEAN, South Korea and Japan have FTAs with many more countries than we do, including China.

·        This enables close supply-chains to develop and prosper  for example, in electronics, where components and sub-assemblies wander around Asia with tiny bits of value-addition at each step in each country.

·        Tariffs are not the only barriers to trade. Non-tariff barrier (NTB) from France required electronic consumer products to be imported only through the port of Lyon  which would have been fine, except that Lyon is not a port.

·        Our pharmaceutical firms report great difficulty in getting approvals to sell in Indonesia, South Korea and Japan in spite of specific inclusion in the FTA.

·        The free trade agreement (FTAs) do provide opportunities for export of agricultural (including processed) products of interest for macro, small and medium enterprises (MSMEs).

FTAs positives

·        Though, India's trade deficit as a percentage of total trade has increased, India's total trade has also increased

·        FTAs that were considered, India's engagement with ASEAN was the biggest in terms of the size of total trade ($81 billion) and the size of trade deficit ($12.9 billion).

·        While India's exports to all FTA partners primarily comprise non-raw material goods, its imports are mainly goods like heavy machinery and iron and steel products, which are not finished products but something that add to the production capacity of India.

·        In the case of ASEAN, non-consumer goods account for 84 per cent of total imports. This can be an ideal export and import structure of India vis-a-vis FTA partners.

Kindly review...thank you

KEY POINTS

·        India signed a series of Free Trade Agreements (FTA) in Asia that came into force in the 2000s.

·        The success of an FTA should be judged against its objective of enhancing trade. If the proportion (and not just absolute level) of both imports and exports between the countries concerned has grown, then an FTA is successful for both parties.

FTAs ineffective for India

·        Overall, our FTAs have had little effect on our trade flows: Accounting for 16.3 per cent of our trade in 2000 and 17.9 per cent of it today.

·        India is not the only country signing FTAs. ASEAN, South Korea and Japan have FTAs with many more countries than we do, including China.

·        This enables close supply-chains to develop and prosper  for example, in electronics, where components and sub-assemblies wander around Asia with tiny bits of value-addition at each step in each country.

·        Tariffs are not the only barriers to trade. Non-tariff barrier (NTB) from France required electronic consumer products to be imported only through the port of Lyon  which would have been fine, except that Lyon is not a port.

·        Our pharmaceutical firms report great difficulty in getting approvals to sell in Indonesia, South Korea and Japan in spite of specific inclusion in the FTA.

·        The free trade agreement (FTAs) do provide opportunities for export of agricultural (including processed) products of interest for macro, small and medium enterprises (MSMEs).

FTAs positives

·        Though, India's trade deficit as a percentage of total trade has increased, India's total trade has also increased

·        FTAs that were considered, India's engagement with ASEAN was the biggest in terms of the size of total trade ($81 billion) and the size of trade deficit ($12.9 billion).

·        While India's exports to all FTA partners primarily comprise non-raw material goods, its imports are mainly goods like heavy machinery and iron and steel products, which are not finished products but something that add to the production capacity of India.

·        In the case of ASEAN, non-consumer goods account for 84 per cent of total imports. This can be an ideal export and import structure of India vis-a-vis FTA partners.

For review!

Kindly review thank you