Defending the policy of inking FTAs with different countries,Commerce and Industry Minister Anand Sharma has said India needs to connect and integrate with the world and can’t have a “wall around” itself.
“When we look at our FTAs,we are a beneficiary,we are not a loser,” Sharma told PTI in an interview.
He said that India’s share in the global trade is low and to enhance the overall economic growth,the country has to increase its share by boosting exports.
“When we are talking of the larger economic integration of Asia and going right up to the Pacific… Can India keep itself out? India cannot insulate itself. You can not grow by having a wall around ourselves. We live in a globalised world,we have to connect and integrate,” he added.
The minister said several countries are integrating with each other to enhance trade and investments between them.
“Let’s not forget what is happening in the world,” he said,citing examples of North American Free Trade Agreement (NAFTA); Mercosur (an alliance of Argentina,Brazil,Uruguay and Paraguay); Trans-Pacific Partnership (TPP) (involving nine countries including Australia,New Zealand and the US); and the Transatlantic Trade and Investment Partnership (TTIP).
“We are neither Pacific nor Atlantic,we are an Indian ocean country,so we also have to look at how we have our own fair share or how we have regional mechanisms and arrangements for trade and investments,” Sharma said.
Besides several experts,apex body of exporters,FIEO,has said that exports to several countries with which India had signed FTAs have shown a declining trend.
According to media reports,the finance ministry too had raised concerns over the impact of these pacts on the Indian economy.
However,Sharma said: “When it comes to trade agreements,there is always a balance and then there is an inbuilt review mechanism. Let’s not forget that India’s share in global trade is still very low. It is little over 2 per cent.
“We need to double it at the earliest,because of economy of India’s size cannot grow unless and until our share in global trade,including exports,increases.”
India has so far implemented FTAs with countries like Singapore,Korea,Japan,Malaysia and Asean. The country is negotiating similar pacts with several nations include Australia,Canada,European Union and New Zealand.
In 2012-13,India’s exports to South Korea stood at USD 4.20 billion but imports have jumped to USD 13.10 billion,leaving a trade deficit of about USD 9 billion.
Similarly,India’s exports to Japan stood at USD 6.10 billion during the period and imports were aggregated at USD 12.41 billion,leaving a trade deficit of USD 6.31 billion.
Under these pacts,tariffs have been reduced or eliminated on about 95 per cent of goods traded between two regions.