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The new government seems likely to significantly slow down the pace of negotiations on free trade agreements or preferential trading arrangements such as a Comprehensive Economic Partnership Agreement (CEPA) or Comprehensive Economic Cooperation Agreement (CECA) with other countries.
It has maintained silence on this matter, throwing up widespread speculation on the trade pacts under negotiation. Nor did the now-ruling Bharatiya Janata Party detail its stand on the issue in its poll manifesto.
However, sources told Business Standard the government’s silence on the issue was a subtle indication that bilateral trade deals were not a priority.
| PENDING DEALS HANGING IN BALANCE |
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Some major deals in almost the final stages of talks are an India-Canada CEPA, India-Australia CECA, India-New Zealand CECA and an India-European Union Trade and Investment Agreement.
Under the earlier government, substantive work on talks in reduction of agricultural and industrial tariffs had already happened. The fate of all these key deals and others are uncertain. New commerce and industry minister Nirmala Sitharaman has not elucidated on her stance to the officials.
There are also murmurs within the ministry of commerce and industry that the trade policy division under the commerce department might be brought under the multilateral economic relations division within the ministry of external affairs. It is perceived that the trade deals in operation weren’t negotiated as they should’ve been, leading to rising imports from the partner countries, while exports from India have not seen a significant jump.
Officials say this is especially true of the trade deals that India signed with the Association of Southeast Asian Nations, Japan and Korea. Though signed with much fanfare, the tangible results hoped for haven’t been apparent. One reason India chased these big trade pacts was to obtain more access in the services market for its professionals. Even that did not fructify properly, because of Japan and Korea’s refusal to clinch agreements under which both parties agree to recognise each other’s academic standards and degree programmes.
Within the deal on services, India had been pressing for greater opening of cross-border supply of services through electronic means, such as business process outsourcing. And, of services export involving natural movement of professionals to provide services in the other country such as doctors, lawyers, nurses and chefs, among others.
