India builds 4-lane FTA roadmap: US and EU in sight, minerals and neighbours next

Time of India

3 hours ago

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.
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by Taboola
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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.
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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.