Commerce and industry minister Piyush Goyal said on Thursday that India is working towards ‘early harvest’ agreements with the UK and Australia as part of a larger trade pact.
“UK is progressing well. Teams are talking to each other, scoping is being done, line ministries are identifying areas in which we can quickly close the deal, in terms of early harvest, if possible. Instead of trying to address 11,000 (tariff) lines, if we can look at their and our areas of interest and close an early harvest agreement and (then) negotiate on the rest of the agreement,” Goyal said, while addressing export promotion councils.
Similarly, Australia has shown the ‘highest level of engagement’ and significant interest to do an early harvest agreement. An early harvest deal is a precursor to an FTA, in which the trading partners reduce tariff barriers on limited goods to promote trade.
At the moment, India is at a ‘positive momentum’ with respect to inking FTAs with the European Union (EU), UK, Australia, Canada, Bangladesh, UAE and Gulf Cooperation Council (GCC) nations, as well as Israel.
Considering the past experiences, India has revamped its strategy towards inking trade deals.
“We are engaging with industry to ensure that FTAs are fairly and equitably crafted. At the same time, FTAs cannot be one-way traffic, we also need to open our markets, if we want a larger share in foreign markets. So, we need to identify areas where we can withstand competition. We can sort out FTAs fairly quickly, if the areas where we have the ability to compete internationally can be identified, as part of a collective effort,” Goyal said.
“Our effort is to ensure focus on countries where we have significant potential, where we can compete better and where market size is significant,” the minister said.
Finalizing a trade deal between India and EU may not be a smooth ride, considering there are 27 nations in the trade bloc and talks have restarted after a gap of eight years.
Similarly, the US has indicated that they are not looking at a new trade agreement with India. Instead, both nations will work with them to address market access issues on both sides, which will be a big opportunity for exporters. In the past, India had extensive discussions with the US on a mini trade deal. However, the deal didn't get through.
Had it not been for the outbreak of the pandemic and elections in Canada, the trade agreement with the country would have been at a more advanced stage, the minister said.
The minister’s statement assumes significance, with India walking away from the China-backed Asian trade bloc Regional Comprehensive Economic Partnership (RCEP) that signed an agreement last year to create the world's biggest free trade bloc. Last week commerce secretary had also said that signing FTAs are crucial as India is not a part of any local or regional regional arrangement.
“If the FTA with UAE happens, FTAs with GCC countries too will get expedited,” the minister said.
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