Commerce and industry minister Piyush Goyal on Thursday said India’s talks with the UK on the proposed free trade agreement (FTA) are well on track, but New Delhi will have to “wait and watch” the ongoing political developments in Britain.
Goyal’s statement came after the resignation of Liz Truss as British prime minister on her 45th day in the job. “We will have to wait and see…what happens, whether they have a quick change of leadership, whether it goes to the whole process… So, let us see who comes into the government and what their views are. It is only after that we will be able to formulate a strategy vis-a-via the UK,” Goyal said at national exports summit organised by Confederation of Indian Industry (CII).
Highlighting that politicians and businesses across the board in the UK recognised that it is “very important” for them to do an FTA with India, Goyal said, “So, my own sense is that whoever comes into the government will be wanting to engage with us.”
The minister said the trade pact should be fair, equitable and balanced. It has to be a win-win for both sides and there is no deal unless both are satisfied, he said.
“We are carefully analysing what we really need to protect. We will have to be in the spirit of give and take. What amazes me is when industry tells me we want access in those countries but we will not allow their product to come into our country,” Goyal said, adding that it is difficult for negotiating positions.
He said FTA talks with Canada and the EU, too, are on track.
The minister said that protecting the farmers is important because there it’s a very unequal competition as India’s 4-5-acre farmers can’t compete with Australia’s 1,000-acre farmers and, therefore, New Delhi kept these out in the FTA with Australia.
Quality control and MRAs
Goyal said the developed world is hesitant to accept too many Mutual Recognition Agreements (MRA) and that reciprocity is the way ahead.
“I’m finding very less traction in many parts of the world to enter into MRAs… Maybe they need more time to build confidence in our ability to provide that high quality goods and services,” Goyal said. He said the way forward is that India also puts quality control orders (QCOs) on products that other countries want to supply to India.
However, he lamented the lack of support from the industry. “The US has 4,500 QCOs and we have only 450 and you resist our effort to introduce high quality standards,” Goyal said, adding that India protected the auto industry till 80s and there were only Ambassador and Fiat cars. He said the production-linked incentive (PLI) schemes can give a kickstart but every industry will have to compete and stand on its own.
$2-trillion Exports by 2030
Goyal said achieving $2 trillion exports of goods and services by 2027 looks challenging, but it can be done by 2030 if goods were to grow 12% CAGR in dollar terms and services at 18-19%.
“Sadly, we have lost the time during Covid and are losing the momentum because of the conflict between Ukraine and Russia, which has caused so many economic stresses worldwide – inflation, supply chain disruptions, energy issues. All of these are stresses in the system which have delayed some of our plans,” Goyal said.