Free trade deals call for more than tariff parleys

Web of compliances, regulatory regimes, domestic industry concerns can slow down India's talks with the EU and the UK

- Biswajit Dhar

For the first time since India became actively engaged in negotiating bilateral free trade agreements (FTAs) two decades ago, the country's negotiators will have their hands full as the government has begun engaging with three major partners, the EU, the UK, and the US for early conclusion of FTAs.

While the negotiations with the US should begin within weeks, the agreements with the EU and the UK appear to have reached a decisive phase following the visits by European Commission President Ursula von der Leyen and British trade minister Jonathan Reynolds.

Though India and its two prospective FTA partners were enthusiastic about the early conclusion of the FTAs even in the past, an added dose of urgency is being shown now.

It seems probable that this sense of urgency was triggered by the US president's protectionist trade policy and its likely adverse consequences for global trade.

Faced with these uncertainties, India and its two partner countries look keen to clinch the agreements, assuring themselves of additional market access.

They could, thus, carve out safe havens when protectionist sentiments seem to be on the rise.

India must respond to this emerging situation by opening its markets, with adequate preparedness and careful consideration of sensitivities.

It also needs to carefully weigh the changes the EU and the UK are seeking in its regulatory regimes, particularly in the area of intellectual property protection, which can have far-reaching implications.

Both the EU and the UK are seeking enhanced market access in India through sharp reductions in tariffs, especially in some of the highly protected sectors such as automobiles.