PremiumIn 2019, India, one of the leading consumer-driven markets in the world, pulled out of the mega RCEP trade deal, concerned that the elimination of tariffs would open its markets to a flood of imports that could harm local producers
NEW DELHI : India will lose huge opportunities if it keeps out of free trade agreements (FTAs) and Indian companies should aim to become globally competitive instead of adopting a protectionist stance, Niti Aayog CEO Amitabh Kant said on Wednesday.
Addressing a virtual event organised by the Broadband India Forum, Kant said the fear of being flooded by imports from FTA countries is not the correct approach.
"You first do manufacturing, bring size and scale, become globally competitive so that you can penetrate the global market. Problem is that Indian manufacturing companies spread protectionism," he said.
According to Kant, Indian companies must have the courage to take on global competition.
"Whether you like or not, over a period of time, you will see that FTAs will happen between different blocks and if India keeps out of it, we will lose huge opportunities also.
"And therefore it is very incumbent upon Indian companies to actually realise that you may benefit in one sector by not promoting FTA with Europe, but our textile exporters are losing there," he explained.
Kant further said as long as Indian companies are globally competitive, they will benefit global markets.
"Also important to understand that in global markets, you get 5X value of what you get in the domestic market. Indian companies must look at exports and use India as a hub for penetrating the global market," he said.
Noting that massive reforms have been carried out by the government, Kant said this is the right opportunity to penetrate the global value chain because they are moving away from one country and looking for alternative locations.
"And therefore, this is the opportunity for India and if we don't seize this opportunity now, then we will never be able to seize again," he asserted.
In 2019, India, one of the leading consumer-driven markets in the world, pulled out of the mega RCEP trade deal, concerned that the elimination of tariffs would open its markets to a flood of imports that could harm local producers.
The Regional Comprehensive Economic Partnership (RCEP) deal signed in November comprised 10 member countries of the Association of Southeast Asian Nations (ASEAN) and five of the bloc's dialogue partners -- China, Japan, South Korea, Australia and New Zealand.
Last week, Commerce Secretary Anup Wadhawan said talks will resume soon on the stalled free trade agreement with the European Union (EU) as well as a pact with the UK.
Replying to a question on the production-linked incentive (PLI) scheme, Kant said the government realised that everything cannot be manufactured in India.
"There has to be theory of competitive advantage, what we are good at we should manufacture, what we are not good at we should not manufacture," he said.
