India shifts trade strategy, favours PTAs over FTAs with South Africa, Mercosur & others: Official
India will pursue preferential trade agreements with developing economies like South Africa. This approach opens select product categories instead of deep market access. India is also negotiating preferential trade agreements with Mercosur and exploring options with Mexico. The government emphasizes inclusive stakeholder consultations for all trade pacts. This consultative style contrasts with…
New Delhi: India is shifting its trade strategy towards Preferential Trade Agreements (PTAs) instead of full-fledged Free Trade Agreements (FTAs) with developing economies like South Africa. A senior government official stated that while South Africa is not a highly developed economy, pursuing a full FTA would require a more significant opening of the Indian market, which might not be in India's best interest.
Instead, India has opted for a PTA route where both sides will identify specific products of mutual strength and interest. South Africa will gain market access in areas where it has strengths, while India will secure access to products of its own interest.
PTAs, unlike FTAs, reduce tariffs and trade barriers on selected goods traded among member nations. They do not remove all tariffs and typically apply only to a list of specific products. India is also engaged in PTAs negotiations with Mercosur, the South American trade bloc, as well as Mexico and Kenya. Discussions with Ecuador, which has independently approached India, are also being explored for a full FTA.
However, the Commerce Secretary is set to visit Chile by the end of August or next month to evaluate the possibility of a mutually beneficial deal, should one be reached.
The official criticized the previous UPA government's approach to FTAs, stating that stakeholder consultations were superficial. In contrast, the current government follows a "whole of the government, whole of stakeholders" model of negotiation, ensuring that all relevant stakeholders are consulted before finalizing any trade agreement.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
