Par Panel suggests review mechanism in FTAs

Major Endorsements

• Policy measure for business-friendly environment and modern mfg infr

• FTAs with nations that seek to invest in India under the strategy

• FTAs should be concluded expeditiously to reap trade benefits

• Focused approach in increasing market access of downtrend sectors in exports

• Continuation of fiscal benefits and extension of a sunset clause

• Extension of benefits of RoDTEP scheme to the sectors of pharma, organic and inorganic chemicals and iron and steel

New Delhi: Free trade agreements (FTAs) being negotiated by India should include the provision of a review mechanism to ensure mid-way course correction in case asymmetries are noticed in trade with the partner country, a Parliamentary Panel has recommended.

The report of the Parliamentary Standing Committee on Commerce also said that India needs to leverage the 'China Plus One Strategy' for becoming an alternative investment destination for major global companies. The growing preference of firms located in major economies of Europe and the US to shift from China to other manufacturing bases provides a window of opportunity for India's trade sector, which needs to be capitalised, it said. The committee has recommended that a policy measure to benefit from the strategy should be devised, which should incorporate steps to ensure a business-friendly environment and modern manufacturing infrastructure for the incoming investments.

The government should endeavour to FTAs or preferential trade pacts with nations that seek to invest in India under the strategy, the report said. "...the provisions of FTAs with partner countries should have an inherent review mechanism for ensuring mid-way course correction for any asymmetries in trade," it added.

It also said that FTAs should be concluded expeditiously to reap trade benefits. Further, the panel called for the release of the forthcoming foreign trade policy (FTP) within the stipulated timeframe. On India's exports, it said that decline in the outbound shipments in any sector should be dealt with a firm hand. "The committee recommends that the department (of commerce) should identify the infirmities and opt for a more focused approach in increasing market access of the sectors that exhibit a downtrend in exports," it added.