India may review some of its free trade agreements (FTAs) which have not yielded the desired results economically, the government has indicated.
During a discussion on geopolitics on a national news channel, External Affairs Minister S. Jaishankar contended that the FTAs India entered into with various nations over the years have not been able to serve the country’s economy well in terms of building its capacities.
A free trade agreement is a preferential arrangement between countries in which members reduce tariffs on trade among themselves while maintaining their own tariff rates for trade with non-members.
As per the Commerce Ministry, India has FTAs with Sri Lanka (1998), Afghanistan (2003), Thailand (2004), Singapore (2005), Bhutan (2006), Nepal (2009), South Korea (2009), Malaysia (2011) and Japan (2011).
Besides, India also has two regional trade agreements, the South Asian Free Trade Agreement (SAFTA; comprising Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka, 2004) and the India-Association of Southeast Asian Nations Agreement (ASEAN comprising Indonesia, Thailand, Malaysia, Singapore, Philippines, Vietnam, Brunei, Myanmar, Cambodia, Laos, 2010). Outside Asia, FTAs have been signed with Chile (2006) and South American trade bloc MERCOSUR (2004).
During the discussion, Jaishankar said: “Look at the state of the economy, look at the state of the manufacturing, then look me in the eyes and say yes, these FTAs have served me well. You won’t be able to do that.”
Though he was quick to add that all the FTAs are not the same, the Minister said there are ways of engaging the world which does not necessarily have to be FTA-centric.
He said post-Covid-19, the world is heading towards a more protectionist economy. “Either you are in the game or you are not in the game…. I would say that the era of great caution and very much greater dependence on multilateralism, that era is, to a certain extent, behind us,” he argued.
“We have to step out more, we have to be more confident, we have to articulate our interests better, we need to take risks because without taking risks like in business or in banking, you cannot get ahead. Those are the choices we have to make and I think there is no getting away from it,” Jaishankar said.
Describing India’s neighbourhood as “complex”, he said India is often like a “punching bag”. The creation of structural linkages could, however, address the problem of volatility resulted by domestic politics of the countries, he said. “If we are to grow by leveraging the international situation, then you have to exploit the opportunities out there,” he added.