India’s ongoing trade negotiations must consider whether the deals will strengthen imports into the country or incentivize inflow of investment. Discuss (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· While the concession details under the CEPA are awaited, India is actively engaged in other discussions on trade deals, prominent amongst them being the ones with UK, USA, and EU.
· It is noteworthy that India has significant trade deficits with three of the aforementioned regions. Another factor to note is that three of these regions have significant manufacturing capacity and investment in their own territories.
· Trade agreements and PLIs: In the past two years, the government has launched incentive schemes wherein based on a threshold level of capital investment and incremental production, subsidies are to be given to approved applicants.
· The proposition could become even more attractive if it is combined with certain pre-existing special governmental schemes that reduce costs and conserve cash flow.
· Trade governance: PTAs are governed by written agreements between nation states or groups of nation states and domestic laws of the signatories. However, the enforcement of the commitments thereunder, depends on the extent to which the parties honour them.
· It is expected that a holistic view, keeping in mind the government’s schemes on investment and trade governance, would inform future negotiations as well as review of existing trade agreements of India.
