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.