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Business Standard
22-06-2025
- Business
- Business Standard
India pursuing FTAs with mature, rule-bound markets: S Jaishankar
External Affairs Minister S Jaishankar has termed India's bilateral trade agreements as the 'space to watch', and said New Delhi has, over the past 11 years, pursued trade pacts with countries that have 'more mature markets' and are more 'transparent and rule bound' compared to East Asian countries. Jaishankar said India is now more interested in key free trade agreements. He said the one with the United Kingdom is more or less finalised, the one with the European Union is in advanced stages of negotiation, and there have been several rounds of discussions between Indian and American officials for a bilateral trade agreement. In an interview to public broadcaster DD India, a link to which the minister posted on X on Saturday, Jaishankar said that in the years following economic reforms, most of India's trade agreements were with Southeast Asian nations, which 'skewed the balance' as several of these economies competed with India and did not provide market access. It was important to make the correction and reach an understanding with more mature markets, which are more transparent and rule bound. Jaishankar said India's trade pacts with the United Arab Emirates and Australia are significant achievements, describing New Delhi's push for FTAs as the 'space to watch'. In 2019, India did not join the Regional Comprehensive Economic Partnership (RCEP) trading bloc that comprises the 10-member ASEAN grouping and other Asia-Pacific economies, including China, Australia and Japan. He said India has, in the past 11 years, systematically tried to 'deepen our posture, our strategic posture, to have good relations with all major countries, but also other regions, so that we get into the optimal position'. In the past 11 years, the EAM said, the consistent theme underpinning India's foreign policy has been planning for a multipolar world, which India not only desires as it gives it a higher profile and more influence. 'But it is not just the question of our wishes, that is the direction in which the world is moving,' he said, which is why New Delhi, despite enormous pressure on it, maintained its relationship with Russia, he added. About India's ties with the US, he said, 'Where the US is concerned, yes, there is unpredictability, therefore at a systemic level, you stabilise it with as many linkages and relationships as possible.' On India's relations with China, Jaishankar said, 'With China, if you have to stand up to that country and we have had some very difficult periods, (and) so it is important to prepare the capabilities.' The minister said a 'really perplexing' aspect of India's China policy before 2014 was the 'complete neglect of our border infrastructure in the previous decades'. 'To have a China policy and neglect your border infrastructure was absurd,' he said. 'And that is one of the things which has changed. We have today that standing up, in defence of our national interests, along the LAC. It is because we have built the border infrastructure to make that possible,' Jaishankar said. On India's ties with its immediate neighbours, Jaishankar said that India 'should not expect smooth sailing' all the time. He said New Delhi has attempted to shape a 'collective interest' to build an inherent stability in relationships, irrespective of changes in regimes. At the end of the day, 'the logic every one of our neighbours must realise' is that working with India will 'give you benefits', and not working with India 'has a cost', he said. 'Some take longer to realise, some understand it better. One exception of course is Pakistan, because it has defined its identity under the army, in a way it has an in-built hostility in it. So if you put Pakistan aside, the logic will apply everywhere else,' the EAM said.
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Business Standard
22-06-2025
- Business
- Business Standard
Jaishankar calls India's trade pacts with mature markets 'space to watch'
External Affairs Minister S Jaishankar has termed India's bilateral trade agreements as the 'space to watch', and said New Delhi in the last 11 years pursued trade pacts with countries that have 'more mature markets', and are more, 'transparent and rule bound' compared to the East Asian countries. Jaishankar said India is now more interested in key free trade agreements. He said the one with the United Kingdom is more or less finalised, the one with the European Union is in advanced stages of negotiations and there have been several rounds of negotiations between the Indian and American officials for the bilateral trade agreement. In an interview to public broadcaster DD India, a link of which the minister posted on X on Saturday (June 21), Jaishankar said in the years after the economic reforms, most of India's trade agreements were with Southeast Asian nations, which 'skewed the balance' as several of these economies competed with India and didn't market access. It was important to make the correction and have an understanding with more mature markets, which are more transparent and rule bound. Jaishankar said India's trade pacts with the United Arab Emirates and Australia are significant achievements, describing New Delhi's push for FTAs as the 'space to watch'. In 2019, India did not join the Regional Comprehensive Economic Partnership (RCEP) trading block that comprises the 10-member Asean grouping, and other Asia-Pacific economies, including China, Australia and Japan. He said India in the last 11 years has systematically tried to "deepen our posture, our strategic posture, to have good relations with all major countries, but also other regions, so that we get into the optimal position". In the last 11 years, the EAM said, the consistent theme underpinning India's foreign policy has been planning for a multi-polar world, which India not only desires, as it gives it a higher profile and more influence. 'But it is not just the question of our wishes, that is the direction in which the world is moving,' he said, which is why New Delhi, despite enormous pressure on it, maintained its relationship with Russia, he added. About India's ties with the US, he said, 'Where the US is concerned, yes, there is unpredictability, therefore at a systemic level, you stabilise it with as many linkages and relationships as possible.' On India's relations with China, Jaishankar said, 'With China, if you have to stand up to that country and we have had some very difficult periods, (and) so it is important to prepare the capabilities.' The minister said a "really perplexing" aspect of India's China policy before 2014 was the 'complete neglect of our border infrastructure in the previous decades'. 'To have a China policy and neglect your border infrastructure was absurd,' he said. 'And, that is one of the things which has changed. We have today that standing up, in defence of our national interests, along the LAC. It is because we have built the border infrastructure to make that possible," Jaishankar said. On India's ties with its immediate neighbours, Jaishankar said that India "should not expect smooth sailing" all the time. He said New Delhi has attempted to shape a 'collective interest' to build an inherent stability in relationships, irrespective of changes in regimes. At the end of the day, 'the logic every one of our neighbours must realise' is that working with India will 'give you benefits', and not working with India 'has a cost', he said. 'Some take longer to realise, some understand it better. One exception of course is Pakistan, because it has defined its identity under the army, in a way it has an in-built hostility in it. So if you put Pakistan aside, the logic will apply everywhere else,' the EAM said.
Indian Express
22-06-2025
- Business
- Indian Express
From the Opinions Editor: India needs a well thought out trade strategy, but first it needs a China strategy
Dear Express Reader Over the past 11 years, the Narendra Modi government has taken several steps to shore up the economic momentum, and put the country on a higher growth trajectory. But, despite its efforts to ensure macroeconomic stability, revive private sector investments and boost household consumption, growth has been less than spectacular. Between 2014-15 and 2024-25, the economy grew at an average of just 6.2 per cent. Now, in its third term, whether pushed by Donald Trump's tariff war or the imperatives of growth, the government is making a determined effort to sew up trade agreements, hoping they will help embed the country into global supply chains, catalyse exports, and push up growth. A trade deal has been struck with the UK, and talks are proceeding with the US and the EU, with many of the issues that have previously held back these agreements being either resolved or sidestepped. These agreements will ensure greater market access and bring down tariffs, improving competitiveness of exports. But the question is: Will these trade deals be enough? Can they alone facilitate India's deep integration with global supply chains? Can the country emerge as a major production hub without integrating more closely with the supply chains that run through South and East Asia which form a vital part of global production systems? The case of Apple is instructive. The dramatic scaling up of the Apple ecosystem in the country — the company has recently said that iPhones sold in the US market will be mostly sourced from India — is a remarkable development. It is a consequence of both the government's production linked incentive scheme and the firm wanting to diversify its production bases away from China. Now, Apple provides a supplier list — a list that represents 98 per cent of the company's direct spend for materials, manufacturing and assembly of its products worldwide. This would include suppliers not only those involved in the production of the iPhone but also in other Apple products. As per this list, in 2023, 156 of the company's suppliers had manufacturing locations in China, 42 suppliers were located in Japan, 35 in Vietnam and 33 in South Korea, and 14 in India. Two years later the numbers would have changed slightly — as per a recent report there are now more than 20 component suppliers in India — but, they would still point towards the centrality of South and East Asia, and China in particular, to the global production system — a fact that cannot be ignored. If India wants to be a part of the production chain of other Apple products and grab a greater share of the value addition in the production process, it would need the smooth flow of components/materials into the country and more component manufacturers to be located here. And therein lies India's conundrum. What is India's China strategy? Should the country also be a part of RCEP (Regional Comprehensive Economic Partnership) and CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership)? In 2019, India chose not to be part of RCEP — the trade agreement that spans China, Japan, South Korea, Australia, New Zealand and the 10 ASEAN member states (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam). The decision to not join was in large part attributed to concerns over China. But the trade relationship with China has only deepened since. And that is the reality, contrary to the desire of reducing the dependence on China. In 2018-19, before India withdrew from RCEP, its trade deficit with China stood at $53.5 billion. By 2024-25, it had surged to $99.2 billion, without RCEP. India, though, is not alone. Even as the US has tried to reduce its reliance on China, its deficit with the country, though it has declined in recent years, stood at a staggering $295 billion in 2024. And this does not account for rerouting of exports through other countries. But, it's not just about companies like Apple. The issue around rare earth minerals — used in a range of sectors such as smartphones, TVs, EV cars, solar panels and jet engines — underlines China's centrality to the global production system. This reality cannot be wished away. China accounts for 90 per cent of global processing of rare earths. With the country placing restrictions on its exports, EV manufacturers in India have reportedly sought the government's intervention in the matter. If these supplies continue to be restricted, India's EV push, and thus its efforts in shifting towards a cleaner vehicle fleet, risk being affected. And that won't be the only sector that is likely to be impacted. There are some reports which suggest that the government has raised the issue of export curbs on rare earth minerals and magnets with China. But it's not just India. Even the US has been affected. In fact, one of the key aspects of the US-China agreement that was announced by Donald Trump is the upfront export of full magnets, and any necessary rare earths by China. It is difficult to see companies move their production to India on the scale that is needed for the country to emerge as a manufacturing powerhouse unless they can be sure of stable trade relations, of supply chains working smoothly, of the seamless movement of components/personnel from other jurisdictions. India needs a well thought out trade strategy. The lack of clarity partly explains the sluggish pace of investments in the country by domestic as well as foreign firms — both of whom seem to be more inclined to invest in other jurisdictions presumably because the risk-return matrix is not as favourable in India. A clear strategy should give these firms the confidence needed to invest in the country. Take care, Ishan
The Star
21-06-2025
- Business
- The Star
Cambodian DPM urges investors to maximise benefits from Regional Comprehensive Economic Partnership, bilateral free trade agreements
PHNOM PENH: (Bernama-Xinhua) Cambodian Permanent Deputy Prime Minister and Cabinet Minister Vongsey Vissoth (pic) on Friday (June 20) urged investors to reap maximum benefits from the Regional Comprehensive Economic Partnership (RCEP) agreement and bilateral free trade agreements (FTAs), Xinhua reported. Cambodia is a member of the RCEP agreement, which engages with 15 Asia-Pacific countries, and the kingdom also has bilateral FTAs with China, South Korea and the United Arab Emirates (UAE). Under these free trade pacts, Cambodian products have been exported to those countries with preferential tariffs. "I would like to urge investors to maximise the opportunities and benefits from the RCEP agreement and Cambodia's bilateral FTAs with China, South Korea, and the UAE," Vissoth said in a speech to hundreds of investors and business executives at a Cambodia-international investment promotion platform in Phnom Penh. He said these free trade pacts have played a crucial role in "diversifying markets for garment products to the Association of Southeast Asian Nations (Asean), East Asia, and other regions besides the United States and Europe." Entering into force in 2022, RCEP comprises 10 Asean member states of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and their five trading partners, namely China, Japan, South Korea, Australia and New Zealand. Zheng Xianjiang, co-president of the Cambodia Confederation of Investors Association, said Cambodia is a "golden hub" for investment as the Phnom Penh-Sihanoukville Expressway, the Sihanoukville Special Economic Zone, and the international deep-sea port of Sihanoukville have provided convenience for trade exchanges between Cambodia and the rest of the world. Moreover, under the RCEP and the FTAs, trade between Cambodia and these countries has been conducted with no barriers, he said at the event. Zheng added that these trade pacts have created favourable trade and investment opportunities for investors in Cambodia. Cambodian Ministry of Commerce's Secretary of State and spokesperson Penn Sovicheat said the RCEP agreement and bilateral FTAs will help Cambodia realise its ambitious goals of becoming an upper-middle income country by 2030 and a high-income nation by 2050. "These free trade pacts have not only given a big boost to Cambodia's sustainable trade growth in the long run, but also become a magnet to attract more foreign direct investments to the kingdom," he told Xinhua. Kin Phea, director general of the International Relations Institute of Cambodia, a think tank under the Royal Academy of Cambodia, said the RCEP has emerged as a key advocate for free trade and multilateralism in the wake of escalating protectionist policies, particularly from the United States. "The RCEP has become a stabilising force, fostering economic integration across the Asia-Pacific," he told Xinhua. At the forum, 21 memoranda of understanding were signed between representatives of Cambodian and foreign enterprises, covering a wide range of business areas. - Bernama-Xinhua
Time of India
20-06-2025
- Business
- Time of India
India builds 4-lane FTA roadmap: US and EU in sight, minerals and neighbours next
India has prepared a four-part strategy for its free trade agreements (FTAs), targeting developed countries, nations rich in minerals, developing economies, and its neighbours. The first phase of this approach is expected to materialise by the end of the year, with potential deals involving the United States and the European Union. According to Times of India, negotiations are already underway with several countries, including Chile, Peru, Australia, and New Zealand. In parallel, the commerce department is ramping up its negotiating teams and is also working to ensure that exporters are actually using the available preferential tariffs. Recent data points to improved utilisation of such tariffs, especially in the case of the UAE. However, detailed numbers for each country are still being collated by the commerce department. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like If You Eat Ginger Everyday for 1 Month This is What Happens Tips and Tricks Undo The Modi government, which had previously taken a cautious approach towards FTAs, is now moving with a more structured plan. This shift came after India opted out of the China-led Regional Comprehensive Economic Partnership (RCEP) a few years ago. The first pillar of the new FTA framework is focused on complementarities. "If we are competing for the same set of products, it does not make sense to have an FTA," ToI cited an official. Live Events As a result, the government's initial focus has been on developed nations. These countries, due to their higher cost structures, are not seen as direct competition in labour-intensive sectors. But this strategy also requires India to move away from its usual reluctance to reduce tariffs on sectors previously considered sensitive. These include automobiles and products like wine and alcohol. The UK trade deal has already been finalised, while agreements with the EU and US are in progress. India and Canada have also agreed to restart discussions. Among neighbouring countries, some are off the table, such as China and Pakistan. But India is open to moving ahead with talks involving nations like Sri Lanka and Mauritius. At the same time, the government is trying to secure critical minerals and resources through its trade discussions. These include countries such as Australia, where a chapter on this issue is proposed in the expanded trade pact, as well as Chile, Peru, and nations in the Gulf region. Many of these also fall under the category of developing countries, a segment expected to gain more attention in coming years. While trade negotiations are ongoing, the commerce department is also reinforcing the structure and continuity of its teams. In nearly all talks, a team led by a chief negotiator—at the rank of additional secretary—is being constituted. This is supported by two joint secretaries. Other ministries are also involved in the discussions, since trade agreements have sectoral implications. These include the ministries of agriculture, labour, and various departments handling industrial goods. To build the necessary expertise, the Indian Institute of Foreign Trade has been asked to develop training modules. These are not only for government negotiators but also for private sector participants, a senior official said. All lessons from the ongoing negotiations are being documented, and standard operating procedures (SOPs) are now being prepared to guide future talks.
