Economic strength is the foundation on which foreign relations are built. The biggest indication of a rising economy is countries rushing to sign FTAs with it. FTAs are always futuristic and indicate trust in the macroeconomic fundamentals of an economy. In India’s case, they indicate much more than that. These FTAs are catalysing India’s securing a dominant pole in the 21st century world order.
India-GCC FTA
India and the Gulf Cooperation Council (GCC) have agreed to expedite legal and technical requirements for the resumption of FTA negotiations. Commerce Minister Piyush Goyal said that the deal will be finalised at the earliest.
The bloc comprising Saudi Arabia, the United Arab Emirates, Bahrain, Qatar, Oman and Kuwait is India’s largest trading bloc. In FY22, India did trade worth $154 billion with GCC. Dr NFM Al-Hajraf, General Secretary of GCC said “Businesses have entered into a new challenging era, FTA to be in place for trade and investment, food and energy security, climate change and others. The relations between the GCC countries and India are deeply rooted.”
Also read: Piyush Goyal is running the Commerce Ministry like a CEO and FTAs are his flagship products
FTAs and ministry’s preparations
GCC is not the only geographical entity eager to sign an FTA with India. India has already signed FTAs with the UAE and Australia in 2022. Next in line are the European Union, United Kingdom, Canada and not to forget, Uncle Sam.
The ministry has nine sections, each having both public officials and experts from the business sector. There are already 70 complete Standard Operating Procedures. 80 Directors and Deputy Secretaries have received training to handle these FTAs’ intricate nuances.
India’s interests are protected
The alacrity is puzzling to begin with. According to a Deloitte report, Indian traders have been a net loser on every other FTA in the past. They have been able to utilise only 3 per cent of available opportunities in the past. The best estimate in favour of Indian traders is that of 25 per cent. This begs the question of why India would take more such risks.
The answer is multifold. To begin with, India is taking due care in bilateral deals. For instance, in the case of an FTA with the UAE, India will provide duty-free access to 90 per cent of its products while the UAE will do the same to 99 per cent of ours. Something along similar lines happened with the Australian FTA as well. The English did not understand it and that is why their trade deal is already stuck with India.
India benefiting from lost credibility of trade forums
These deals lay their necessitate origin to Covid-19. WTO has simply lost its significant position in the post-Covid world order. More and more countries are refusing to abide by set norms of international trade and getting conservative in protecting their interest. India pulling its plug on RCEP was the first indication of the developing world being fed up with developed ones’ shenanigans.
The distrust over west dominated forums like RCEP, NAFTA, USMCA and WTO among others is turning out to be advantageous for India. If you look at the countries willing to engage in FTA with India, every country is a part of the major grouping. The US is a superpower and there is no need to elaborate on its significance. Canada is a member of the affluent G7 group.
Also read: India-Australia’s historic FTA gives major heartburn to China
India has infiltrated every forum
Australia is a part of QUAD but was quick to identify the bilateral interest in having an FTA with India. Its former colonial master the UK is also a member of G7. In fact, one of the reasons the UK left the European Union is because it wasn’t happy with trade deals signed by the EU. Talking about the EU, the European bloc comprising 26 countries wants to have its own FTA with India.
There is a pattern emerging here. India does not favour multilateral FTAs and countries are not shying away from joining India. In a way, India has its proxies on every big forum on diplomatic tables.
There is a reason why the whole west could never unite against India on its Ukraine-stand. Interests of their friends lie in India’s willingness to let them participate in its economic journey. We just need to hold it tight.
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