| Date: |
17-07-2015 |
| Subject: |
CEA Arvind Subramanian to look into country's FTAs, suggest areas for renegotiation |
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NEW DELHI: The government has asked chief economic advisor Arvind Subramanian to look into the country's trade agreements and suggest areas that need a review and renegotiation, a senior official said. There is a feeling that the India has given away too much in bilateral and multilateral trade agreements negotiated over the years, leading to a flood of manufacturing imports that are hurting the domestic industry.
Subramanian, who has seen world trade from close quarter during his stint at GATT, the multilateral trade organisation that preceded the WTO, will now pore over these agreements. "The study would focus on what tangible benefits country has secured and in what sectors," said the official privy to the development.
Within the government, the departments of economic affairs (DEA) and revenue in the finance ministry have in the past expressed concerns over the trading arrangements giving away too much on the goods side in return for too little.
The DEA had even commissioned a study by the Indian Institute of Management on FTAs after high imports pushed up country's current account deficit, posing risk to its currency in early 2013.
The department of revenue has time and again raised concerns over rise in third country goods entering into India as imports from trading partners under these formal arrangements.
"There are issues over goods from third countries finding their way into India....a close examination is needed," said a finance ministry official.
In 2013, New Delhi even suspended gold jewellery under the India-Thailand early harvest scheme following alerts of third party goods finding entry into India at lower duty in alleged violation of the rules of origin under the agreement. The move to comprehensively study trading arrangements comes at a time when India is in talks with some key countries and groupings for pacts including the Regional Comprehensive Economic Partnership (RCEP) and the European Union.
The Narendra Modi-led government wants to carry forward its trade engagement with ample caution to ensure they bring tangible benefits for domestic industry, particularly in the manufacturing sector. Earlier, a high-level panel set up by the cabinet secretary to look into the woes of medium and small enterprises had said that concerned ministries and departments should be consulted extensively before entering into talks for a trading arrangement.
The government is already revisiting the bilateral investment promotion agreement model draft after many foreign investors invoked international arbitration after their investments ran into trouble or faced adverse policy action.
Source : economictimes.indiatimes.com
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