22/10/2022 - International Relations

KEY POINTS

·        India’s FTA strategy is premised on using these agreements to secure markets for its goods and services.

·        Mandating almost unrestricted cross-border data flows and prohibition on localisation of servers will prevent India from leveraging its huge data advantage for creating a vibrant domestic digital economy.

·        Thus, FTA provisions on digital economy are likely to make India overwhelmingly dependent on imported digital products, thereby compromising Atmanirbhar Bharat in the digital sector.

·        Turning to trade and environment, the provisions in the existing FTAs of UK, EU and Canada are likely to undermine domestic manufacturing in India.

·        Another risk to domestic manufacturing arises from the likely commitment to adopt high standards of environmental protection, or a move towards harmonisation of environmental standards.

·        Further, provisions in the FTAs are likely to create windows for our FTA partners to impose non-tariff barriers on India’s exports.

·        This will substantially nullify the prospects for enhancing our exports, which might otherwise be available through tariff reductions by our FTA partners.

·        In conclusion, the writing on the wall is clear. In the quest for enhancing its exports of goods and services by a few billion dollars through FTAs with the UK, EU and Canada. 

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