The government will examine the impact of free trade agreements (FTAs) on domestic companies and prepare an action plan to retain the competitiveness of the local industry, Parliament was informed today.
"The (Trade and Economic Relations) committee decided that a group would collectively examine in detail India's engagement in FTAs (free trade agreements) and prepare an agenda for change/action needed on different fronts to retain our global competitiveness," Minister of State for Commerce and Industry E M S Natchiappan said in a written reply to the Lok Sabha.
The last meeting of Trade and Economic Relations Committee (TERC) was held in November, 2013.
On the question whether the government has assessed the impact of FTAs on a regular basis, he said lack of data on preferential imports under the various FTAs has been an impediment towards assessing the impact of these pacts.
India has implemented such pacts with Singapore, Japan, Korea, Malaysia and Asean bloc. Industry and exporters have raised concerns over the impact of these pacts on the domestic industry and the country's shipments.
Some concerns were expressed on the suspected adverse impact of FTAs on the domestic manufacturing sector as well as the effect on trade balance, he said.
The minister said assessment of impact of free trade agreements was a continuous process.
"The Department of Commerce has studied the impact of these FTAs on domestic industry as well as on the export sector even though it is felt that 2-3 years is too short a period to come to any conclusive assessment of their impact and more so because of the lingering impact of the economic slowdown that has affected international trade in general," he added.
Natchiappan said that the full impact of these agreements would "only be evident once the transitional period has played itself out and the agreed tariff liberalisations have been fully implemented".
"The impact analysis of FTAs has been hampered by the lack of reliable data on this important sector," he added.
Replying to a separate question, he said during the last three financial years and the current fiscal, investigations have been initiated under Foreign Exchange management Act 1999 in 102 cases for alleged violation of FDI norms.
"Further details are not revealed, as the said cases are still at various stages of investigation. The onus of compliance with the FDI norms lies on the entity that is the recipient of FDI," he said.
