India Export Strategy: FTA, US Tariffs & Growth

New Delhi, Aug 14 (PTI) The government is working on four strategy pillars, including fast-tracking trade pact negotiations and promoting ease of doing business, to push the country's exports in the wake of steep US tariffs on Indian goods, a top official said on Thursday.

Commerce Secretary Sunil Barthwal said that at a time when global trade is facing uncertainties, the commerce ministry is focusing on improving export competitiveness, strengthening export promotion, export diversification (products and markets), and import diversification.

He also said that India has requested the UK to fast-track approval of the Comprehensive Economic and Trade Agreement (CETA), which was signed on July 24, so that it comes into force as early as possible.

With the European Union also, "we are fast-tracking our negotiations," he told reporters here.

A lot of work has progressed in the proposed pact between India and the EU, and both sides are hoping to conclude the talks by the end of this year, Barthwal said, adding there are further meetings that are going to happen on this.

The meetings will happen at the negotiator, secretary and minister's level.

Talks with Oman have concluded, and the deal may be signed when dates are decided mutually by both countries, he said.

"That (trade pact with Oman) is very close in terms of signing," the secretary said, adding discussions are also progressing with New Zealand, Peru, and Chile.

With the 10-nation Asean bloc, the review negotiations for the free trade agreement in goods are happening.

"Yesterday we discussed how we can improve trade between India and ASEAN," he said, adding along with this, "we are also focussing on increasing FTA utilisation with countries with which we have already signed these pacts".

Working on a strategy is crucial amid the steep tariffs imposed by the US on Indian goods. Already, a 25 per cent additional import duty is in place on Indian goods since August 7, and another 25 per cent will come into effect from August 27, raising the total taxes on Indian goods to 50 per cent.

A host of labour-intensive sectors such as chemicals, leather and footwear, gems and jewellery and textiles have raised serious concerns over the impact of these tariffs.


"There are uncertainties because of these tariffs...Tariffs are getting revised...There is still no clarity about what is happening on the globe.

"In this uncertain environment, we thought that let's have a clear-cut strategy so that we can focus on our exports in a manner which is within our control...we have strategised across four pillars," Barthwal said.

Under strengthening export promotion, the ministry already has different export promotion schemes, but there is a need to further strengthen them.

In import diversification, there is a need to reduce dependencies on a few countries and enhance domestic sales.

"First approach is to focus on our free trade agreements (FTAs)," he said, adding the commerce ministry will work on fast tracking facilitating the utilisation of these pacts.

"We are looking at saturation of FTA utilisation...It is a gradual process, but we will be focusing now more on this," he said.

The ministry, he said, is now focusing on 30 more countries in addition to 20 earlier, for pushing India's exports.

These 50 countries constitute more than 90 per cent of India's export basket, and they include Malaysia, Indonesia, Mexico, Italy, Belgium, Nigeria, Oman and Poland.

"As a strategy, we will focus on these countries. We will do more export promotion activities in these nations," Barthwal said.

On the impact of US tariffs on India, an official said the ministry is in touch with stakeholders.

"We know the sectors that are more exposed towards the US...we are talking to export promotion councils and trying to understand their exposure to the US," the official said, adding states are also looking at how they help and facilitate exports.

The official said trade in domestic currencies may also be discussed during meetings between a visiting high-level Indian delegation and Russian counterparts.

"A very high-level delegation is going from MEA (Ministry of External Affairs), and the commerce will also be participating in that high-level delegation to Russia," the official said.