Study reveals India’s “free” trade deals come at a cost
13 December 2018: A recent study by think-tank Third World Network into India’s “free” trade deals with Japan, South Korea and the Association of Southeast Asian Nations (ASEAN) has increased India’s trade deficit, reports Hindu Business Line. In other words, there are more imports to, and less exports from India.
The study notes the rising trade imbalance over the past decade between India and its trading partners, coupled with little benefit by way of increased ease of movement for skilled professionals.
These results are important and likely influential as the Indian government continues re-examining its trade policies. In recent years it has cancelled existing bilateral agreements that contained rights for investors to sue governments (ISDS), and last month made the uncommon but welcome announcement of studies commissioned into potential impacts of the Regional Comprehensive Economic Partnership (RCEP) deal. The Indian government is concerned the RCEP will allow Chinese companies to flood its domestic markets, impacting on local workers.
The report suggested it is of particular concern that India’s exports have slowed significantly at a time when trade deals have provided additional market access. Companies in trading partner countries are gaining an advantage through trade liberalisation it seems, while companies in India are losing out.