What the article is about:
- The article talks about India’s recent Trade agreement with Australia and UAE, and what measures should India take to protect her domestic players.
Relevance:
- GS3: Effects of policies and politics of countries on India’s interest.
Analysis:
- In the last decade India’s export to EU countries have grown at a faster pace than the country’s overall exports.
- Along with thatIndia has signed trade agreements with other nations as well.
- Hence to protect the domestic players India need to craft agreements which keeps domestic industry safe.
Must-haves of a free trade agreement:
- Care should be taken to ensure that the domestic industry is not made to compete on unequal terms with the partner countries. For example: Strong Clause on the rules of origin in India-UAE comprehensive economic partnership agreement.
- “Offset clauses” – where the exporter is obliged to undertaken activities that directly benefit the importing country’s economy – should be built into trade agreements, especially for technology intensive sectors.
- An emergency action plan could be another useful instrument in trade agreements, there should be a contingency plan for the situation like India’s suspension from USA’s GSP (generalised system of preference)
- India can include a “sunset clause” by taking hint from US-Mexico-Canada agreement.
- Finally, India should negotiate for the parity between the services and merchandise.
Conclusion:
- A well- crafted trade agreement could help India enhance its share in global trade and help India attain the government’s target of making the country a $5- trillion economy.
