Commerce ministry sets up FTA utilisation cell to boost industry awareness, leverage pact benefits

New Delhi, Oct 7 (PTI) The Department of Commerce has set up an FTA utilisation cell to help domestic businesses understand and tap opportunities in markets covered by India's free trade agreements, Commerce Secretary Rajesh Agarwal said on Wednesday.


He said that with India finalising a number of free trade agreements (FTAs), several opportunities are emerging across sectors, and informing entrepreneurs about these opportunities is the ministry's target.


"We have created an FTA utilisation cell in our Department of Commerce. The idea behind that cell is - first explain the FTA and explain the opportunities to every entrepreneur across the country through the industry associations, through the EPCs (export promotion councils), through the state government so that people understand what a free trade agreement provides for and how these are new opportunities that businesses need to look at," Agarwal said here at the India-EFTA Prosperity Summit.

"Two, work with all the EPCs to see that we are able to improve FTA utilisation, we are able to have an action plan for each of the markets with our partner country, and we are able to work on it for the next 4-5 years to actually see that these FTAs lead to actual integration of partner country market with Indian market," he added.

Agarwal said that every industry should know about these pacts and see how they can connect with the supply chain.

"We held a national workshop on these pacts, and now during this month, we will discuss with all the states, industry and exporters about the FTAs that we have finalised and those that have been implemented. After that, we will organise workshops at the district level also during this fiscal so that all entrepreneurs get the message about the advantages of FTAs," the secretary said.

India has finalised trade pacts with the four-nation EFTA bloc, New Zealand, Mauritius, the UAE, Australia, Oman, the European Union (EU), and the UK.

India-EFTA (European Free Trade Association) trade and economic partnership agreement (TEPA) was implemented in October last year. EFTA members are Iceland, Liechtenstein, Norway, and Switzerland.

The secretary said that the EFTA pact should not be seen in isolation, as India has finalised a trade pact with the 27-nation EU and the UK.

"So altogether, we have got 32 countries in the region with which India will have a free trade arrangement wherein we will have the majority of our trade at zero tariffs. We have opened up our markets for them, and they have opened up their markets for us," he said.

He added that trade agreements are not only about tariffs and tariff arbitrage as it provides predictability to the domestic industry and exporters.

"The big-ticket item in trade agreements is tariff predictability because for businesses...now you know that for perpetuity or for the entire near future that you can see, the tariffs are going to remain stable and they are not going to throw any surprises in between. So you can take investment risks, you can build supply chains based on that, and you can plan your future business growth based on that. That is the strength of this agreement," he said.

Agarwal also said that these 32 countries are developed nations with a very high per capita income.

"With a high per capita income, what you see, the key characteristics are that it is a high consumption market in terms of both volume and value,” he said, adding, "It is a market which will ask you quality but which will also deliver you value."

The exporters should take advantage of these agreements by taking long-term business decisions.

These pacts, he said, also provide export opportunities in the agriculture sector.

For agriculture also, he said, these are high consumption markets as they import agri goods worth over a trillion dollars.

"If you are looking at a market of that size, I think there is a huge opportunity for us. The tariffs in agriculture have not gone down to zero in every sector, but they have gone down to zero, or there has been preferential access in many of the products where we do have strengths," Agarwal said.

Out of total imports of EFTA, India's share is less (about USD 2-3 billion), which is less than one per cent.

"Can we use these FTAs, the business certainty that it gives, to actually aspire to arrive at maybe 2 per cent of the overall import basket of this market in the next 3-4 years," he said.

He suggested the export promotion councils make action plans to tap into the opportunities of these pacts.