Siddhartha Sanyal on significance of India-EFTA deal

Siddhartha Sanyal, Chief Economist & Head-Research, Bandhan Bank says “as India is moving up very significantly in the global export chain and in the global value chain, as a country, we are a lot more confident now and that is showing up in this particular agreement with the four European nations and it can act as a stepping stone for a few more going ahead in the coming days. So, it is very significant in my view.

This angle is probably not very clearly scratched that we want to integrate more with the world in terms of trade and better ties. In that light, how significant do you see the free trade agreement between India and the European FTA block (India-EFTA)?
Siddhartha Sanyal: This is very significant. First of all, one very silent revolution is taking place over the course of the last few years, maybe a decade or so, where very clearly in the global supply chain and the global value chain, India is silently moving up in a very significant fashion.

It is not necessarily a country anymore which exports primary commodities only like tea and rice and items like carpets and jute. There has been a very significant uptick in some of the high tech areas as well. Petrochemicals, chemicals, drugs and pharma, engineering, automobiles exports are equally important.


So, when we are moving up very significantly in the global export chain and in the global value chain, as a country we are a lot more confident now and that is showing up in this particular agreement with the four European nations and it can act as a stepping stone for a few more going ahead in the coming days. So, it is very significant in my view.

Do you see more such FTAs being signed going forward and also which are the sectors here in India where you are likely to see big investment coming in because of incremental free trade agreements?
Siddhartha Sanyal: I think more should be in the offing. Very clearly the global supply chain is going through a process of resetting itself given the China plus one policy, which is being discussed across the board.

Also, in the next one year or so, it will be very busy in terms of political calendars across the globe. So, there is a bit of an urgency on the part of a lot of countries to get into and sign out some of these FTAs before the political events come significantly closer and also without losing much time given the reset in terms of the China plus one global supply chain strategy.

That way, we will get to see more of these things. India as a country will be benefiting as well and also given India's such large market, a lot of other countries might also be equally keen to get into some kind of an FTA with India, as that gives them a significant access. At the same time, we have grown up significantly without thinking too much about the infant industry argument. We are much more confident in terms of taking on global competition, raising the bar for our own domestic industry and playing at the global scale rather than trying to protect the smaller domestic focused companies only.