Union Commerce Minister Piyush Goyal stated on Thursday that at least two more free trade agreements will be signed in 2023. Negotiations are scheduled with the United Kingdom, the European Union, and Canada, Goyal said at an event here, adding that his ministry lacks the bandwidth to respond to requests from smaller trading partners such as New Zealand, with which the bilateral trade stands at USD 350 million.
Goyal said at an event marking the operationalization of the India-Australia Economic Cooperation and Trade Agreement, which was signed in April this year that January is already jam-packed with meetings between Indian Commerce Ministry officials and their companions abroad.
After handing over certificates of origin to the first Indian goods sent to Australia following the agreement, Goyal stated that the FTA benefits fit various industries, including textiles, gems and jewellery, and information technology, which would benefit from the elimination of double taxation.
Goyal predicted that Indian IT companies’ billing to Australia alone would increase to USD 1 billion in the next 5-7 years, up from USD 200 million.
The Regional Comprehensive Economic Partnership (RCEP), from which India withdrew in 2019, would have effectively become a free trade agreement with China, according to Goyal, who added that the earlier UPA government’s decision to begin negotiations on the REP had “petrified” Indian industry.
He described the strike as an economically prudent and wise decision.
With the agreement with Australia, India now has separate trade agreements with 13 of the 15 countries in the RCEP, leaving only New Zealand and China.
He stated that with the free trade agreement, the ministry expects bilateral trade between India and Australia to increase to USD 31 billion in five years.
According to Goyal, the agreement is a win-win document with complementarities as its fundamental building block, as India will gain access to cheaper raw materials like coal from Australia. At the same time, finished Indian goods will have a market there.
With the new Australian government ratifying the agreement, Goyal claims that 98 per cent of Indian exports by value will enter the country duty-free.
Meanwhile, when asked about former CEA Arvind Subramanian’s criticism of tariffs harming the government’s production-linked incentive scheme, the country’s inward-looking attitudes toward trade, and the harm done to Indian enterprise by the government’s desire to create “national champions” in the industry by promoting specific groupings, Goyal said the former CEA wants India to open up gradually. In contrast, the government prefers to open up gradually.
Goyal believes it is essential to calibrate opening up so that the Indian industry gets adequate time to mature, evolve, and compete on fair terms.