New template for trade deals with targeted pacts
new delhi, May 6 -- In a major strategic shift, India is moving away from negotiating full-fledged free trade agreements (FTAs) and instead opting for short-term, limited-scope deals with several countries, including the UK and New Zealand, said two people familiar with the matter.
The ongoing trade talks with the US for a bilateral trade agreement are also part of this "early harvest approach", focusing on negotiating tariffs and non-tariff measures, with sensitive issues such as intellectual property rights and emigration set aside for now, they said.
"This new approach is aimed at accelerating outcomes in the ongoing trade talks while avoiding the long-drawn negotiations typical of comprehensive FTAs," said the first person.
This would mark a fundamental departure for Indian trade negotiators.
India, as part of its FTA talks, has thus far been pushing for its skilled labour, especially in IT services, to be allowed to live and work temporarily in countries such as the UK. Likewise, developed countries are pushing for stronger Indian protections on intellectual property rights.
Other contentious areas include European insistence on labour and environmental standards for Indian goods.
These short-term trade agreements, which may be structured as early harvest deals or phased pacts, are expected to focus on specific sectors of mutual interest rather than full tariff liberalization across all goods and services. This shift in the policy landscape is seen as a response to the growing trend of countries announcing one tariff measure after another. The steep rise in tariffs by the US has prompted countries, including India, to rethink their strategy and pursue early trade deals to ensure smoother trade flows.
"Amid the changing geopolitical landscape, early trade deals aim to make the movement of goods and services between countries easier. If successful, these early harvest agreements can provide a strong base for a full trade deal in the future," said the second person.
Both the persons spoke on the condition of anonymity.
Experts say India's focus on limited trade deals is a smart way to get quick results but warn that past mistakes must be avoided to protect key interests.
"This is a practical approach. At the same time, we should be careful not to leave issues of our core interest to be addressed later," said Abhijit Das, former head of the Centre for WTO Studies, New Delhi....
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