With India's total trade (including imports and exports) contributing to nearly 50 per cent of India's GDP, around $900 billion to $1 trillion in a $1.8 trillion economy, there's a need to focus on the value of foreign trade. This was necessary as a large importance was being given to the domestic market and exports have been taking a back seat.
Free Trade Agreements (FTA), as an Indian trade policy, has been rather late in a global context and the country needs to catch up with the rest of the world, A K Tripathy, Joint Secretary, Ministry of Commerce & Industry, Government of India, said in Bangalore.
Meanwhile, Tripathy said the Centre is engaged with the RBI to include export sector under the priority sector lending of banks, a move that will help exporters get easy and affordable credit. He added that a senior commerce ministry official said that credit is expensive in India.
"Commerce ministry has been successful to take the Finance ministry on board to engage with RBI to workout a package for the export sector, that export sector lending should be a priority sector," Tripathy said in Bangalore.
Indian exporters have been demanding inclusion of export credit in priority sector lending. "If this materialises it will be a big game changer for the export industry," he said.
Hence, he added that FTA in India needed to go beyond just the goods trade and extend to the services sector as well, and FTA was also one of the best ways to bring down the trade barriers..
He said, there were huge opportunities in the ASEAN region and said, India needs to make inroads into the region and overcome the existing trade barriers. He said that despite the 'Look East Policy' that was in existence over the last two decades India's trade was still focused largely on the West. He called on trade bodies to do more research in order to capitalise on the ASEAN region.
Meanwhile, Sandeep Maini, Vice-Chairman, CII Karnataka State Council, and Director, Maini Precision Products Pvt Ltd, lamented the Indian industry not exploiting the full potential of FTAs. He added that FTA was one of the best ways to reduce the trade barrier. He said India was aggressively expanding its trade through FTAs and with the exception of the USA and China, India has engaged all major trade blocks with respect to FTA. According to Maini there was tremendous potential for India with vis-à-vis FTA.
According to M S Srikar, Director, Ministry of Commerce & Industry, "With the services sector gaining enormous importance in the Indian economy over the last few years, it has become a major force of the economy, and hence, the service sector contributes around 56 per cent to the GDP." Surplus on account of India's services exports has been a cushioning factor for financing a large part of the merchandise trade deficit in recent years, he added.
