TRADE AGREEMENTS – THE INDIAN PERSPECTIVE
Commodity focussed RTAs
FTAs should be product focussed and a post facto analysis must be done to analyse whether the FTA brought the anticipated effect on the export of said commodity or not.
Regular stock-taking of proxy issues
A comparative study of time taken to grant RoO certificate by the competent authorities of the partner country must be undertaken to assess the unapparent impediments to fructification of an FTA. Rules of origin defines the minimum local content or value addition for manufactured goods to enjoy the duty benefits under a trade agreement. It varies from country to country. For example, as per the India- Thailand trade agreement RoO rules – Minimum value addition requirement is 40% while in case of India-Singapore FTA, minimum value addition requirement is 60%.
Timed response to measures consistent with the WTO
India needs to pursue, a policy and strengthen ability to respond to trade measures consistent with the World Trade Organization, such as anti-dumping and conventional duties and safeguard measures which has been misuses by different countries in absence of transparent NTB norms.
Incentivising economies of scale
The growth of exports of products manufactured by MSME units has been 7.5% during FY 2017-18 while during 2015-16 and 2016-17 it registered an export growth of 5.9%, and 4.8% respectively. However the focus of MSME has been domestic market centric since the domestic market size has been able to sustain the growth of MSME so far. Hence the need for export focussed growth of the industry has remained largely absent in Indian context. Another issue is the limited capacity of firms engaged in exports which are unable to gain from economies of scale.