15 Jan Significance of India UK talks for complete FTA (Free Trade Agreement ) GS Paper 2, Paper 3 Source : The Hindu
Significance of India UK talks for complete FTA- Today Current Affairs
Context : Piyush Goyal , honorable minister of Commerce and Industry , Government of India started new negotiation for the FTA(Free Trade Agreement ) with Anne Marie , Trade secretary of UK. The FTA will be a comprehensive FTA and this negotiation would be completed within this year
In the era of globalization FTA is a tool to open the borders of countries for export and imports without any restriction. In other words, through FTA business of two countries would be merged and the flow of goods and raw material would be easily done beyond the borders without any restrictions . In the Era of globalization, FTA is necessary , at least with those countries from where we require technologies and we exports our services and good
What is FTA : The Hindu Analysis
A Free trade Agreement (FTA) is an agreement between two or more countries where the countries agree on certain obligations that affect trade in goods and services, and protections for investors and intellectual property rights, among other topics.While the specifics of each FTA vary, they generally provide for the reduction of trade barriers and the creation of a more predictable and transparent trading and investment environment. This makes it easier and cheaper for Indian companies to export their products and services to trading partner markets.
Where is India in FTA : The Hindu Analysis
India has FTA with approx 15 countries including Japan , Australia etc. But The FTA of India’s with any country does not mean that in all economic sectors FTA is there, This FTA varies country by country. With some countries India has multilateral FTA , which means FTA in all sectors , with some countries India has FTA in limited goods and services . Recently India had come out from Regional Comprehensive economic partnership RCEP. In this way , FTA had opted out with Japan, Australia and China in 2019. Infact, Indians are seeking FTA as per its own requirement . Where Indian companies are capable of fighting with the companies of other countries , definitely India should have FTA .
Now India is negotiating for an FTA with the European Union, Arbab countries ,Australia and Canada . India had signed FTA with Association of SouthEast Asian Countries (ASEAN) , The republic of Korea, Japan and Malaysia
India UK FTA: The Hindu Analysis
India has multi dimensional economic partnership with export growth in leather , textiles , jewelry , and proposed agri products . After the negotiation with the UK, it will cover both goods and services . As per the various sources it is assumed that this bilateral trade would be of approximately 50 billion dollars and is expected to be doubled within 10 years . This type of discussion on FTA is going on with UAE, Australia, cana and Israel
Infact , India will be the world’s third largest economy with a middle class of almost 250 million shoppers . The UK is seeking to benefit from this new huge market . For the British , Indian culture is close to British culture . Therefore FTA would be beneficial for both countries
Significance : Definitely FTA enlarges the market and economic activities and FTA would be beneficial for India with developed and developing countries , provided India’s economy should be strong to compete with their economy. Find the context of Britain, definitely it would be beneficial , because in future India would be the country of youth which could generate the huge services and these services would be exported to developed countries and Since India would be the largest market therefore it could consume the products of the UK.
Therefore , this FTA is going to be beneficial for both UK and India
Conclusion : In fact , before the FTA, India should make itself economically strong so that our economy could compete with developed economies . If we were just consumers, our resources would be easily drained to these countries therefore , we should make our population skill first and should create huge human resources , through FTA these human resources would be consumed in the world . FTA is beneficial with those countries whose economic nature is similar and complementary for the economy of India.