From Australia to UK, India seeks new FTAs with growth, jobs and China on its mind

Two years after withdrawing from RCEP talks, India is looking to secure a string of bilateral trade pacts to boost its Covid-19 economic recovery and grow its manufacturing sector

The new-found enthusiasm for FTAs is a shift from Modi’s trend towards protectionism and will help India reduce its reliance on Chinese exports, observers say

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A worker at a bottle factory near Ahmedabad, India. Photo: AFP

Published: 12:30pm, 24 Oct 2021

Days after finance ministers of the G20 nations agreed to push for smoother trade flows by not letting countries erect unnecessary trade barriers, India is already taking its first steps.

New Delhi is setting up a series of free-trade deals in a new-found momentum that comes nearly two years after it exited negotiations for the Regional Comprehensive Economic Partnership (RCEP), which involves 15 economies including Australia, Japan and Asean nations.

Rather than join multilateral agreements like the RCEP, India is looking to secure a string of bilateral trade pacts. It has restarted FTA negotiations with the European Union, which had stalled for 14 years, and is set to begin talks with Israel next month.

India last month also kicked off discussions with the United Arab Emirates and has signalled it is ready to start negotiations with neighbouring Bangladesh for a trade pact by early next year. This is in addition to the deal it hopes to conclude with Australia by next year, along with one with Britain.

The Indian government has said that even as talks are pending, it is likely to sign “early harvest agreements” – or preliminary trade agreements – as early as December with Australia, and by March with the United Kingdom.

Last week, after Indian Commerce Minister Piyush Goyal reportedly met at least 15 of his counterparts at the sidelines of the G20 meeting in Italy’s Sorrento, he said more may be in store. At least two other countries and a bloc of countries were interested in FTAs with India, he said, without naming them.

New Delhi has also announced plans to review its existing trade agreement with the Asean grouping.