New Delhi, A recent report by the Global Trade Research Initiative (GTRI) indicates that both developed and developing nations are eager to engage in free trade agreements (FTAs) with India. The allure stems from India’s burgeoning market and robust economy, offering countries an opportunity to access the Indian market with reduced or zero import duties.
GTRI emphasized that an FTA with India could provide a competitive advantage to nations such as Oman, Peru, Europe, and the UK. The report highlighted that India currently undertakes over 75% of its imports from other countries without FTAs.
Major economies, including the US, Europe, Japan, and the UK, as well as smaller nations like Oman, Peru, and Mauritius, are either in the process of negotiating or actively seeking FTAs with India. The primary motivation behind these efforts is India’s relatively high import duties, posing challenges for countries aiming to tap into its sizable and rapidly expanding market.
Contrary to expectations of a substantial increase in India’s exports resulting from these FTAs, GTRI Co-Founder Ajay Srivastava pointed out that countries with which India is negotiating already maintain low import duties. For instance, the UK’s duties stand at 4.1%, Canada’s at 3.3%, and the USA’s at 2.3%, while India’s import duties are comparatively higher at 12.6%.
The report suggested that countries like the UK and Canada stand to benefit more from the FTAs, enabling them to sell products in India without facing the high duties imposed on other nations. To mitigate the impact on local businesses, the report proposed several measures, including creating a common exclusion list for merchandise trade negotiations and focusing on obtaining genuine market access.
In conclusion, the global interest in FTAs with India reflects the strategic importance of accessing its dynamic market, with countries positioning themselves to leverage the potential benefits of reduced import barriers.
