India Urged to Expedite FTAs, Diversify Exports, and Engage US on Bilateral Trade Agreement

Economic Advisory Council to the Prime Minister (EAC-PM) Chairman S Mahendra Dev has advised India to speed up its Free Trade Agreement (FTA) negotiations and broaden its export markets to regions like Asia, Latin America, and Africa, moving beyond conventional partners. He also emphasized the need for continued dialogue with the United States to finalize a Bilateral Trade Agreement (BTA).

Dev noted that despite global protectionist trends and declining international trade volumes, India's export potential remains untapped. He pointed out recent trade friction between India and the US, particularly concerning India's crude oil imports from Russia, which has led to a significant tariff burden on Indian goods in the American market. He advocated for a rule-based global trade framework, as promoted by the World Trade Organization (WTO).

According to Dev, strong export performance is critical for sustained high growth in large emerging economies like India. He suggested that to achieve a projected 25% share in world GDP by 2043, India needs to increase investment levels from the current 31-32% to 34-35% of GDP, foster medium-sized manufacturing firms, and enhance productivity. He also expressed confidence in India's economic resilience, noting its current status as the fastest-growing economy.

Impact This news directly impacts Indian businesses involved in exports, manufacturing, and international trade. The recommendations, if implemented, could lead to increased trade volumes, improved market access, and potentially higher economic growth, positively influencing investor sentiment and stock performance in relevant sectors. The ongoing US-India trade dialogue also holds significant implications for bilateral economic relations. Rating: 7/10

Difficult Terms Free Trade Agreement (FTA): An agreement between two or more countries to reduce or eliminate barriers to imports and exports among them. Bilateral Trade Agreement (BTA): A trade pact established by two nations to allow for easier trade between them. Protectionist trade policies: Government policies that restrict international trade to help domestic industries. World Trade Organization (WTO): An international organization that regulates world trade. Multiplier effect: An economic principle where an initial increase in spending leads to a larger overall increase in economic activity. Twin balance sheet problem: A situation where the balance sheets of both banks (lenders) and corporations (borrowers) are weak.