15.18         ndian   onom
               Philippines is a new matter of concern      assumed greater importance and a growing share
               which compete with India across a range     in international trade.
               of manufacturing and services.                   While RTAs are broadly compliant with WTO
         (iii) India’s present exchange rate management    mandates and remain broadly supportive of the
               policy gives unusually high weight to       WTO process, they remain second-best solutions
               UAE (due to high oil imports and a          that are discriminatory in nature against non-
               trans-shipment point for India’s exports).  members and are inefficient as low cost producing
               But this trade has almost nothing to do     non-members lose out to members. While
               with India’s export competitiveness. The    bilateral RTAs have no equity considerations,
               policy currently considers overall trade in mega-regional trading groups may not necessarily
               place of the sectoral situations and their  be equitable if membership is diverse and small
               relations with the exchange rate. Due       countries may lose out either way—if they are part
               to this India gives heavy weight to euro,   of it they may not have much say and if they are
               even though it is really Asian countries    not, they may stand to lose.
               which are India’s main competitors (not
                                                                India has always stood for an open, equitable,
               Europe).
                                                           predictable, non-discriminatory and rule-based
         (iv) Ever since the developed countries           international trading system and views RTAs as
               came under the grip Great Recession,        building blocks in the overall objective of trade
               we have seen ‘unconventional monetary
                                                           liberalization as well as complementing the
               policy’ being pushed by most of them—
                                                           multilateral trading system under the WTO.
               with effective interest rates running in
               negatives, too. While the central banks          By March 2017, India had signed 12 FTAs
               in the west have been aiming to push up     (Free Trade Agreements) and 6 PTAs (Preferential
               inflation and growth through it, RBI has    Trade Agreements) and all of these were in force.
               been balancing them (till March 2017).      The net impact of the RTAs on export performance
               Given the situation, it looks advisable     and trade outcome is a mixed bag and requires
               for the RBI (through ‘Monetary Policy       detailed analysis. India follows a gradual approach
               Committee’) to recalibrate its monetary     of widening the process of negotiating the FTAs.
               policy outlook.                             Presently, negotiations on 24 FTAs (including
                                                           review) is under way:20
        rtas by inDia                                           India-Thailand Comprehensive Economic
                                                           Cooperation Agreement (CECA): Early Harvest
     In general, multilateral trade agreements are the     Scheme has been implemented on 82 items. So far
     first best solutions for deepening global trade and   29 rounds of India-Thailand Trade Negotiation
     development as they are founded on the core           Committee (ITTNC) meetings have been held.
     principles of non-discrimination. Meanwhile,
                                                           The 29th round was held in Bangkok in June
     RTAs (Regional Trade Agreements) are efforts
                                                           2015.
     by nations aimed at deepening economic
     relations, usually with neighbouring countries,            India- New Zealand FTA/CECA: Ten rounds
     and tend to be largely political in nature. With      of negotiation have been held so far. The 10th
     the multilateral trade negotiations process under     Round was held in Delhi by February 2015.
     the WTO being a painfully slow one requiring            20.  Ministry of Commerce and Industry, Government of
     broad-based consensus, RTAs have progressively               India, N. Delhi, March 2017.