Comprehensive analysis of free trade agreements underway: Rajeev Kher

NEW DELHI: Amidst concerns raised by industry on impact of FTAs on domestic manufacturing, the Commerce Ministry today said it is undertaking a comprehensive analysis of free trade agreements which India has implemented with its trading partners.

"I would say that this myth that FTAs have been extremely difficult and they have caused a lot of damage to some of the sectors, we are in the process of carrying out an impact analysis of 3-4 FTAs we did in the last five years," Commerce Secretary Rajeev Kher said at a function here.

India has implemented FTAs with countries like Japan, South Korea, Malaysia and ASEAN region.

He said that as per a preliminary study, Japan, South Korea and Malaysia have utilised these free trade pacts in the range of 15-25 per cent.

Kher said that industry should utilise FTAs to build its manufacturing sector.

In the study, he said, "We are looking at how much India has been able to gain from these FTAs."

Globally free trade pacts are being entered into to enhance trade and investment. For example currently two mega trade deals- Transatlantic Trade and Investment Partnership (TTIP) and Transatlantic Trade and Partnership (TTP) are under intense negotiations.

India is also negotiating similar trade pact - Regional Comprehensive Economic Partnership ( RCEP).

These mega trade deals will change the way trade and investment are being carried out in the future and to become a part of global value chain, India has to engage in such pacts.

On the other hand DIPP Secretary Amitabh Kant said that these free trade agreements have led to inverted duty structure which has severely impacted the domestic manufacturing.

Kant said that there is a need to fix the issues in these pacts in order to increase competitiveness of Indian products and boost manufacturing.

On RCEP negotiations, Kher said that deadline to conclude the talks for this pact is 2015 and India has little time to set its house in order to implement this agreement.

There are some issues in RCEP talks as one group is in favour of maximum liberalisation under this pact while the other group including India is of the view for "limited liberalisation."

The 16-member RCEP comprises 10 Asean members and its six FTA partners namely India, China, Japan, Korea, Australia and New Zealand. The 16 economies account for over a quarter of the world economy. RCEP negotiations were launched in Phnom Penh in November 2012.