New Delhi Nov 30 (PTI) The commerce ministry should resolve issues that are hindering signing of free trade agreements (FTAs) with India’s leading trade partners including the US and European Union and enter into such pacts that are beneficial for the country, according to a report of a parliamentary panel.
The Department Related Parliamentary Standing Committee On Commerce in its report ‘Augmenting Infrastructure Facilities to Boost Exports’ said FTAs should be signed while balancing the interest of the domestic market and exporters.
Indian exporters are at a disadvantage in the US and European markets while competing with other exporting countries due to absence of FTAs with the US and EU countries, it said adding there are issues that need to be addressed in negotiating free trade agreements with these regions in view of the concerns expressed by some domestic sectors.
The report stated that while it is crucial to protect the domestic sector, it is equally important to address the disadvantages faced by exporters in global markets.
“The committee, therefore, recommends the Department (of Commerce) to iron out the issues that hindered the signing of FTAs with our leading trade partners and enter into trade agreements that are beneficial for our country while balancing the interest of the domestic market with that of our exporters,” it said.
Under an FTA, two trading partners reduce or eliminate customs duties on the maximum number of goods traded between them. Besides, they liberalise norms to enhance trade in services and boost investments.
The report also said the budget allocation of Rs 12,500 crore for RoDTEP (Remission of Duties and Taxes on Export Products) scheme would be “inadequate” to meet its objectives and the department should engage with Ministry of Finance to provide additional allocation.
Besides, the committee recommended extending the interest subsidy scheme for at least five years or till the time “our interest rates are at par with rates of the competing countries”.
Expressing concerns, the committee stated that India’s exports have contracted since 2019-20, registering a degrowth of 15.73 per cent in 2020.
Though the share of India has shown marginal increase, it has commanded only a meagre share of 2.15 per cent in global exports, it said adding India needs to step up its effort in export promotion, expand its export baskets and penetrate new markets to recover from its current slump and increase its share in global exports.
“India needs to revamp its overall domestic manufacturing conditions and logistics chain to enable our products to be competitive in the global markets,” the report said and recommended the department to take appropriate measures, relook its export strategies and policies to achieve positive growth rate of exports and higher share. PTI RR ANU ANU ANU