Opinion
Our trade thrust has been in sync with the G20 agenda
Summary
- Investors in India and its partner countries can expect a stable environment to do business
That India hosted one of the most successful G20 summits of all under its presidency, that too amid a difficult global geo-political and economic scenario, is commendable. Conducting a G20 summit is like an orchestra, where different ministries, departments and government bodies of the host country work seamlessly under the leadership of the concert-master—in our case, Prime Minister Narendra Modi. With the G20 success, India has shown its skills of coordination, planning and execution to the world. And with the theme of ‘Vasudhaiva Kutumbakam,’ India’s G20 presidency has focused on the philosophy of living in harmony and working together on concrete actions to address global challenges and accelerate the effective implementation of the 2030 Sustainable Development Goals (SDGs). Predictable and equitable trade relations are essential to implement the 2030 agenda and free trade agreements (FTAs) play a key role by helping develop strong trade relationships. FTAs provide businesses with a predictably stable long-term environment amid global uncertainties.
The G20 members account for more than 80% of world gross domestic product (GDP), 75% of global trade and 60% of the world’s population. Hence, their role in setting the path of global trade cannot be overestimated. The inclusion of the African Union in the G20 under the current presidency strengthens the voice of the Global South and enhances the status of this forum. The plurilateral body is now a more balanced multilateral body.
Let’s focus on trade and the role of FTAs. Several issues, ranging from the removal of tariffs and non-tariff barriers to collaboration over regulations and standards, resilient global value chains and the integration of Micro, Small and Medium Enterprises in these chains are now being discussed as part of FTAs among G20 members. This helps us build a wider consensus on matters related to the World Trade Organization (WTO) and other forums.
To build strong trade partnerships, India has taken the right decision to launch a series of FTAs and bilateral trade discussions with key trade partners. Today, global leaders and business communities look at India as an important trade partner and market. This, together with targeted domestic reforms to facilitate trade and foreign investment, has aroused business and trade interest in the country from across the world. India’s Comprehensive Economic Cooperation and Partnership Agreement (CECPA) with Mauritius, Comprehensive Economic Partnership Agreement (CEPA) with the UAE, and Economic Cooperation and Trade Agreement (ECTA) with Australia were quickly sealed within two years. Trade negotiations with the UK are at an advanced stage; both sides have tried to address many sensitive issues through dialogue and cooperation, with an objective to almost double bilateral trade and investment flows. The relaunch of trade negotiations with the EU and Gulf Cooperation Council (GCC), bilateral trade talks with GCC-member Oman, ongoing negotiations for upgrading the ECTA with Australia to a comprehensive agreement, and bilateral talks with Peru and Nigeria are some other examples of India’s global trade-talk engagements across multiple geographies. India has successfully resolved its WTO disputes with the US and is reviewing its existing trade agreement with the Association of South East Asian Nations.
India has also shown its willingness to discuss emerging issues in its FTAs. The digital trade chapter in the India-UAE CEPA is one such example.
In the past few years, there have been more than 100 interactions on trade and investment between the ministry of commerce and a range of important interlocutors such as industry representatives, academics, legal experts and businesses communities in India as well as its FTA partner countries. Officials of different ministries have worked closely with each other to negotiate and fine-tune FTA negotiations. More than 5,000 businesses in FTA partner countries participated in business forums and B2B meetings. Piyush Goyal, the Union minister of commerce and industry, virtually led or held in person over 50 such meetings.
I got a first-hand experience of the intense work that goes behind FTA talks, having worked closely with officials of Vanijya Bhawan on issues like how to enhance foreign direct investment (FDI) inflows and drive FDI towards India’s sustainable development goals; develop innovative strategies for diversifying markets and boosting service exports under FTAs; and forge a consensus with partners on sectors like express delivery services and alcoholic beverages. These sustained engagements over the past few years have generated an unprecedented global buzz about India and may have also helped India garner support during its G20 presidency.
While India will hand over the G20 presidency to Brazil in November, it will continue to play a key role in the group by working closely with Brazil and the US. Behind the scenes, FTAs will continue to be a medium for continued government-to-government engagements and business-to-business collaborations.
Commitments under FTAs will help enhance our exports and provide investors in India and FTA partner countries a stable and predictable regime for doing business.
