The Big Picture – Free Trade Agreements: Harmful or Helpful to Build?

Summary:

• The debate over India entering into free trade agreements and opening up our economy to other countries has been on this country for some time now.
• While some are in favour of these agreements, on the other hand there are those who want caution to be exercised when it comes to signing these FTAs as it would affect not only the domestic industry and manufacturing sector but also results in significant losses in the revenue of the exchequer.
• Planning commission had held that more such agreements need to be signed as they promote exports.
• India has signed FTAs with about 20 countries and more are being negotiated.
• We do have alternatives other than FTA.
• FTA is good for building trade and for economic development.
• Studies conducted by various institutions have revealed that the benefits of FTAs are limited.
• We have more number of inelastic imports.
• By large, since we are globalising we should have more open trade. Having more number of FTAs does not necessarily mean that we have lost out.
• We must go ahead with FTA but it should be calibrated.
• FTAs should not be limited to goods only. Our strength is in service sector and FTAs should be extended to cover this sector too.
• The SME sector feels that it is left out of the picture and is unhappy about FTAs.
• The FTAs signed so far cover about a quarter of our total trade.
• Bangladesh is our largest trading partner in South Asia.
• The loss through these FTAs is not much.
• It is vital for the government to analyse our strengths and weaknesses before signing any FTA.
• Transparent negotiations should be carried out. We should include more number of experts and stakeholders in negotiations.
• Manufacturing has been much affected by these agreements. Job creation has also been affected.
• Although some sectors are affected, Overall, FTA has tried to maintain the balance.
• We also need cutting edge technology alongside.
• The challenge before the government is to make these agreements more helpful than harmful.