India will push for bilateral trade agreements in the wake of the emerging geopolitical order instead of multilateral deals. Though New Delhi has not signed any free trade agreement after 2012, the Narendra Modi government is now set to prioritise the proposed trade deal with the UK after it exited the much hyped Regional Comprehensive Economic Partnership (RCEP) in November last year.
While India has been holding talks on a trade agreement with the US too besides UK, it could now push for such a trade deal with Australia too.
“There is need to go ahead with trade agreements which are bilateral in nature so that the thorny issues can be settled in less time and more convincingly,” Ajay Sahai, director general, Federation of Indian Export Organisation said, adding that India must particularly work towards inking a bilateral trade agreement with the UK at the earliest since several other countries including Vietnam have already signed deals with Britain to boost trade.
The Swadeshi Jagran Manch, an affiliate of the RSS said that multilateral trade deals have not worked in India’s favour. The SJM, which had vehemently opposed India’s participation in the RCEP, said that it was open to India's signing of bilateral trade deals.
“We are not opposed to trade agreements with other countries though we have opposed RCEP. RCEP would have harmed us. The agreement is China-centric and while there is an atmosphere of celebration after talks concluded last year, it is to be seen whether the deal actually sees the light of the day,” Ashwani Mahajan, national co-convenor, SJM said, adding that India cannot afford to sign trade deals merely to boost economic diplomacy. “New Delhi needs to push for bilateral trade agreements keeping in mind India’s interest,” Mahajan said.
Analysts said that the proposed agreement with the UK must be given shape as soon as possible especially since Vietnam and Singapore have already sealed agreements with Britain, which is also looking to enter such trade and economic agreements in the post-Brexit era. Vietnam is emerging as a strong competitor to many other economies in trade related issues.
“Contrary to the notion that India is being protectionist, our import duties are WTO compliant and we are open to trade as it is critical to integrate with the global supply chain. India is looking to seal more of bilateral trade deals as our experience says that multilateral agreements have not worked,” BJP’s national spokesperson Gopal Krishna Agarwal said.
While in the past, India entered into several free trade agreements, including one with the ASEAN (Association of Southeast Asian Nations) block. However, these have not yielded the desired results.
According to Niti Aayog, expansion of India’s share in the global exports market is critical to boost overall economic growth of the country. Niti Aayog’s vice chairman Rajiv Kumar said, “It is very important for us to ensure that we have a very coherent and aggressive export strategy for goods, services and some commodities as well and for agro-products,” Kumar said. However he also said that New Delhi must go in for trade deals that are beneficial and suit the country’s national interest.