The parliamentary panel on commerce has asked the central government to consider interim or mini-trade deals with countries that are looking at India as an alternative investment destination for their countries to reduce their supply chain dependence on China.
"The growing preference of companies located in major economies of Europe and US to shift to other manufacturing bases than China provide a window of opportunity for India’s trade sector which needs to be capitalized," the committee said in its 167th report laid in the Parliament on March 22. The government should endeavour to pursue Free or Preferential Trade Agreements or an interim and mini-trade agreement with countries that seek to invest in India under the 'China Plus One Strategy', the report said. It wanted the government to frame policy measures that incorporate steps to ensure a business friendly environment and best-in-class manufacturing infrastructure for such incoming investments.
The committee observed that India signing Free Trade Agreements (FTAs) with trading partners will not only foster favourable access to Indian exports but will also be a tacit acknowledgement that India's stance towards 'Atmanirbhar Bharat' or self-reliance is pragmatic which gives weightage to free and fair trade. "Strengthening trade ties with partner countries on equitable terms would further promote self-reliance by facilitating exports of Indian manufactured goods," the committee said. It recommended faster conclusion of FTA negotiations with the trading partners, as has been done with UAE. It also wanted the provisions of FTAs with partner countries should have an inherent review mechanism for ensuring mid-way course correction for any asymmetries in trade.
The committee welcomed the government's plan to advance negotiations for a Comprehensive Economic Partnership Agreement (CEPA) with Bangladesh and said that it will give impetus to trade cooperation in the sectors of defence and pharmaceuticals. It wanted the government to undertake a prior analysis of the agreement to examine its advantages and impact on bilateral trade and then take earnest efforts to ensure the timely conclusion of the agreement.
It also wanted the government to implement the new Foreign Trade Policy (FTP) from April 1 onwards. "The policies and initiatives designed under the new FTP should also be accommodative with the trade scenario being observed in the 'new normal' of Covid-19 pandemic embracing the resilience to withstand the imminent waves of the pandemic," it said.
