Third, after the revision, the global trade order will most likely be influenced by geopolitical decisions. Many countries are now cautious about China and can strategically orient themselves to other trading partners for imports. India has a good chance in this area and should fill this gap by building its champion sectors with immediate urgency. India can use indications from Vietnam and Bangladesh that make it extraordinarily good, as well as alternative targets for companies that relocate their production out of China. Existing and newly signed free trade agreements should take this trend into account and allow for some economic concessions instead of strategic ones. Political decisions often involve trade-offs between the economy and politics, and the choice of the right compromise is essential. India`s tactical transition from multilateralism to bilateral engagement came at a crucial time. Even before Covid-19 caused chaos, world trade experienced increased uncertainty. A trade war between the United States and China and a collapse of the WTO appeal system to the WTO had only increased the challenges for India, which had been a strong advocate of the multilateral trading system. “The overall impact on India`s exports on the partners with whom the agreements were signed is 13.4% for manufactured goods and 10.9% for total products. The overall effects on imports are less significant (12.7% for manufactured goods and 8.6% for total,” he said.
Note: Any customs union, every common market, any economic union, the Customs and Monetary Union and the Economic and Monetary Union are also a free trade area. Fourth, India could focus more on bilateral trade agreements than multilateral agreements. Negotiations on the Comprehensive Regional Economic Partnership (RCEP) have encouraged India to learn in the strongest possible terms. India`s last-minute decision to withdraw from the RCEP in 2019 was prompted by the industry`s appeal to the Modi government. In retrospect, given China`s dominance in the trade pact and India`s reluctance to open its domestic market to Chinese producers known for their subsidy and dumping practices, the decision was reasonable. The WTO has now forecast a decline in world trade from 13% to 32% in 2020, and economic growth is expected to be at its lowest level since the Great Depression of the 1930s. These will weigh on India, with analysts anticipating a GDP decline of up to 6.8% for the 21st GJ before a smart recovery next year, partly due to a favourable base. The attempt to promote free trade while promoting protectionism under the guise of “atmanirbhar Bharat?”. You can`t have your cake and eat it! Either you open up to trade or you don`t. Fifth, it is essential for India to carefully select its new free trade partners. While the focus should be on countries with greater trade complementarity, making the EU, the UK and the US natural allies, it must be kept in mind that these countries are tough negotiators. The India-EU free trade agreement has been on hold since 2007, as there is no consensus on sectors such as automotive, alcoholic beverages, dairy and fishing services, RRI and fashion 1 (ITES/BPO) and fashion 3 (specialist professionals).
While Trade and Industry Minister Piyush Goyal hopes for a limited trade agreement with the United States after the U.S. presidential election, a full-fledged free trade agreement with the United States is a remote possibility if conflicts such as pharma, data security and agriculture are not sorted. However, increased cooperation in new areas such as artificial intelligence, green technology, digital and medical equipment should lead to a more balanced outcome. As you know, the United States is a difficult negotiator, as we have seen recently. In 2010, it began talks with New Zealand and Australia in 2011, but they were frozen in 2013, when India began negotiating the