The NITI Aayog member V K Saraswat’s research note has said that at the time of signing free trade agreements (FTAs) with trading partners, India should keep two things in mind - mutually reciprocal terms and focusing on products and services with maximum export potential. It also said that before getting into any multilateral trade deal, India should review and assess its existing FTAs in terms of benefits to various stakeholders like industry and consumers, trade complementarities and changing trade patterns in the past decade.
Under a FTA, countries cut or eliminate duties on most number of goods traded between them besides liberalise norms to promote services trade and boost investments. India has so far implemented several such agreements including with Singapore, Japan, South Korea and Association of South East Asian Nations (ASEAN). The country is also negotiating similar pacts with nations including Chile, Australia, New Zealand and European Union.
The note also recommended negotiating bilateral FTAs with countries where trade complementarities and margin of preference is high. It said that proper safety and quality standards should be set to avoid dumping of lower quality hazardous goods into the domestic market. It added that circumvention of rules of origin should be strictly dealt with by the authorities.