Exports of India have been persistently declining
since last 16 months at a time when, India in its trade policy for 2015-20, has
set the target to double its exports by the end of 2019-20. While, the Mega
Regional Trade Agreements being negotiated by the largest traders of the world
viz. USA, Japan, the European Union etc are going to add further turbulence in
the trade scenario for India. India’s free trade agreements (FTAs) have also doubled
to about 42 and we have been negotiating for an FTA with European Union too. Moreover
as per the observation of the finance minister made in the budget 2016-17,
India has been experiencing more inflow of imports than the exports due to these
FTAs with respects to the three mega regional trade agreements, India is party
to only one, i.e Regional Comprehensive Economic Partnership (RCEP) being
negotiated inter se ASEAN10+6. But, the two other mega trade pacts viz. the Trans-Pacific
Partnership (TPP) - a mega trade deal among the 12 countries including the US –
and the Transatlantic Trade and Investment Partnership (TTIP) are going to
further affect exports of India. India
would experience erosion of its trade preferences for several sectors, such as pharma,
textile, chemicals etc when the TPP would see the light of The Commerce Minister
of India, Nirmala Sitharaman has also expressed her apprehension about the adverse
impact of TPP on the export of plastics, leather, textiles, plastics, chemical,
pharmaceutical etc.
On coming to the RCEP, it appears quite likely that
India might experience unprecedented import surge from china, with whom India
has largest trade deficit of $51 billion, Because China is also a negotiating partner
in the RCEP.
In view of the likely turbulence, expected from the
mega regional trade pacts and other FTA’s of India, coupled with a continuous
decline of the exports in the last 16 months, a well targetted strategy needs
to framed to ramp up exports and safeguard economy from the likely import surge,
out of market access being offered under the ongoing negotiations for trade and
investment liberalisation.
