The impact of the aggressive trade policy adopted by India in recent years is now visible at the global level. According to a new World Bank report, India’s free trade agreements (FTAs) with the United Kingdom (UK) and the European Union (EU) could almost double access to global markets for domestic companies. This will provide preferential market access to Indian companies to approximately one-third of the global economy, from about one-sixth of the global gross domestic product (GDP) currently available.
The World Bank in its latest report on trade reforms in South Asia has said that India’s new trade agreements will play an important role in strengthening the country’s export potential, competitiveness and long-term economic growth. This assessment has come at a time when India is also rapidly negotiating a bilateral trade agreement with the US and is moving towards strengthening its role in global supply chains.
“India’s new free trade agreements with the European Union and the United Kingdom will expand the scope of preferential international market access for domestic companies from the current one-sixth of global GDP to one-third,” the report said.
According to the World Bank, South Asia still remains the least open trading region among emerging economies. Merchandise exports across the region will account for only 12 percent of GDP in 2024, about half that of other emerging economies. According to the report, a major reason for this is high duties on imported intermediate goods, which increases production costs and affects competitiveness.
The duty reduction promises made by India under the new trade arrangements are expected to reduce import duties by about 9 percentage points on average. This will provide cheaper raw materials and production materials to industries, reduce production costs and make Indian products more competitive in international markets.
The World Bank believes that the benefits of these reforms will not be limited to industries only. Reduction in import duties can make goods cheaper for consumers, thereby increasing real incomes of various income groups. Especially rural families can get more benefit from it, because the share of manufactured products in their consumption is relatively higher.
The report lists textile and leather industries as among the biggest potential beneficiaries. Both of these sectors have strong export potential, but currently face relatively high import duties. The reduction in duty will provide these industries with better access to raw materials and intermediate products, thereby enhancing their global competitiveness.
However, the World Bank has also acknowledged that opening trade borders could increase competition for some domestic producers. Yet the organization believes that cheaper imported inputs and better productivity will help offset this challenge.
The report also said that about 28 crore people will join the workforce in South Asia in the next ten years. In such a situation, trade integration and export-led development can become important means of employment generation. The World Bank has suggested that to maximize the benefits of trade liberalization, governments must also pursue macroeconomic reforms such as productivity improvements, business expansion, and increased labor mobility.
Also read:
Assam: Love Jihad accused Asif dies in police encounter; Shot was fired at the team that had gone to recover the murder weapon.
‘You are absolutely crazy’ Trump’s anger with Netanyahu over the increasing conflict in Lebanon
Stiffness in back and neck and upset stomach? ‘Saralmatsyasana’ will provide relief!
Not only the pitcher, but the clay bottles and glasses are also special, enhancing the taste along with natural coolness!
Comments are closed.