FTAs not evil, take advantage of these pacts: Kher to industry

Tags: News
Allaying industry concerns over free trade agreements that India has implemented with other nations, a top government official today said FTAs are not "evil" and businesses should take advantage of these pacts.

He accepted however that FTAs have caused some problems to the industry. "A picture has been painted as if FTAs are nothing but evil. But we have to recognise that this is not the fact. The important thing is that we have to see how we are utilising these FTAs," Commerce Secretary Rajeev Kher said at the CII's Export Summit here.

"Go deeper and see how these FTAs can be considered as institutional opportunities," he said.

He added however that "we are aware that some FTAs have caused a certain amount of problem like duty inversion. This needs to be addressed and hopefully it will be addressed".

Kher asked the industry to look at the advantages which these pacts provide in terms of market access.

He said the Commerce Ministry has engaged with all the stakeholders in conveying the "advantages" of these agreement and also "the possible pitfalls".

"In a time where globalisation, rationalisation and integration is inherently important for enlarging the market possibilities, it is important that FTAs will have to be done but with whom that is the point and for that we are open to your suggestions and ideas," Kher said.

Amid concerns being raised by industry that FTAs are benefiting other countries more than India, he said the government is extremely cautious while negotiating the mega free trade agreement - Regional Comprehensive Economic Partnership (RCEP).

The 16-member RCEP comprises 10 Asean members and its six FTA partners namely India, China, Japan, Korea, Australia and New Zealand. The 16 economies account for over a quarter of the world economy. RCEP negotiations were launched in Phnom Penh in November 2012.

Kher said: "We are extremely cautious while negotiating the RCEP. The reason is the concern which industry has conveyed. But please recognise that 16 countries are coming together offering us a seamless territory. It is a great opportunity.

"Of course it has huge challenges like dealing with China, Korea and Japan. So we have to devise a unique strategy for getting into these FTAs. Find a manner in which we can draw best advantages out of this."

The Secretary added that such agreements are not a "zero sum game. We give some and we get some".

India has so far entered into FTAs with Japan, Singapore, South Korea, Malaysia, Asean and South Asia.

During the April-September period of the current fiscal, imports from Singapore, Japan and Korea stood at $ 3.5 billion, $ 5.9 billion and $ 6.1 billion respectively.

On the other hand, exports to Singapore, Japan and Korea stood at $ 6.6 billion, $ 2.6 billion and $ 1.9 billion respectively.

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