Centre to revisit policy on trade pacts

The United Progressive Alliance (UPA) government is set to revisit India's strategy on bilateral trade agreements.

Prime Minister Manmohan Singh today chaired a high-level meeting to review the existing trade agreements and mandated the ministries concerned to formulate a coherent policy on such agreements.

The new policy is expected to harmonise the country's bilateral trade pacts within a multilateral trade framework.

"The meeting took note of the constraints of the ministries concerned. There will be further meetings on this issue in order to formulate a coherent policy," a top government official said.

The meeting was attended by Finance Minister P Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia, National Security Adviser J N Dixit, Commerce and Industry Minister Kamal Nath and representatives of the external affairs ministry.

Over the last one year, India has committed to a host of free trade agreements (FTAs) and preferential trade agreements (PTAs) with countries and trade blocs, including Thailand, the Association of Southeast Asian Nations (Asean), BIMST-EC, Mercosur and Singapore, where the Comprehensive Economic Co-operation Agreement will cover trade in goods and services.

While the BIMST-EC FTA will include Bhutan, Myanmar, Nepal, Sri Lanka and Thailand, Mercosur comprises Brazil, Argentina, Uruguay and Paraguay. In addition, requests have been received from Israel and the government is also considering FTAs with Brazil and South Africa.

India has already signed FTAs with Sri Lanka and has signed an agreement on the South Asian Free Trade Area , which is scheduled to become operational in January 2006.

The meeting was convened by the Prime Minister ahead of his trip to Thailand, his maiden foreign visit after taking office, to attend the BIMST-EC (Bhutan, India, Mayanmar, Sri Lanka and Thailand "" Economic Cooperation) meeting on July 30.

The review of the FTAs has been undertaken in the wake of representations by domestic industry that such treaties are hurting their local market. The finance ministry also fears loss of revenue on account of such pacts.

There is also a perception in some quarters that the previous National Democratic Alliance (NDA) regime had shown undue haste in entering into these agreements.