Kolkata: India has aggressively begun to pursue trade agreements with several countries most of whom hold a lot of promise of deepening trade ties. The government is also pursuing a lot of reforms that could alter the landscape through production-linked incentives (PLIs), labour reforms and supply-chain resilience. All these can take place when the government is trying to restore the pre-eminence of manufacturing in the country’s economic map.
India-Australia Economic Cooperation and Trade Agreement
From the first day of the New Year, Australia will offer zero-duty access across all of Indian exports under the India-Australia Economic Cooperation and Trade Agreement. IN fact, this could turn into a game changing development for the bilateral trade between the two countries. It could do a lot of good to the labour-intensive sectors such as textiles, apparel, leather, gems and jewellery, engineering goods and processed foods. Significantly, these are he sectors that have suffered after Washington slapped the 50% punitive tariffs on imports from India.
This has happened almost parallely with the development between India and Bahrain. These two countries have exchanged draft terms of reference for launching negotiations on a Comprehensive Economic Partnership Agreement. It could eventually lead to a situation where the ties could go well past the traditional confines of energy and can cover manufacturing, logistics and services.
India’s deals with other countries
India has concluded deals with New Zealand, Oman and the UK which are going to be beneficial to all parties involved. The agreement with the UK has balanced tariff reductions with safeguards for Indian manufacturing sectors as well as Indian services exports and professionals. It also gives India access to one of the most developed consumer markets of the west. The deal with New Zealand offers measured market access while avoiding disruptions to India’s farm and dairy sectors, which are of crucial interest to any dispensation. Third, the deal with Oman bolsters India’s role in Gulf supply chains .
However, what everyone is looking forward to is the trade deal with the US that is currently proceeding towards the negotiating table. The US is India’s biggest trading partner and a deal with this country will not only directly help the economy of India but also other sectors such as the stock markets and help revive interest of FIIs in this market.
India’s strategy in a changing world
The series of trade deals that India is engaging with comes with a lot of benefits in a changing world. The blueprint underlying this strategy is to lessen dependence on any single economy or market to do trade. The policymakers of the country now wants to engage with economies across Europe, South America, the Gulf and Asian nations to dig opportunities and thinly spread the risk.
The recent labour reforms have paved the way for reducing rigidity in the labour markets and allow greater flexibility in hiring and operations. These have been the demands of the investors to increase flexibility of operations. The government is complimenting it with PLIs that help the manufacturing sector and generate employment.
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