India does a turnaround on trade spurred by post-Covid economic reality
12th Oct, 2021
Officials say India is rushing to complete a slew of quick-fire bilateral trade agreements by the end of March, as economic need forces a departure from New Delhi's normally cautious approach to trade agreements.The shift also means that Prime Minister Narendra Modi’s government is prioritizing “ early harvest” pacts over comprehensive free trade agreements with partners, a move that’s leaving some countries perplex officials said, asking not to be identified as the talks are private. According to numerous sources, Modi's administration is pressuring ministries, particularly foreign and commerce, to follow through on early agreements with countries such as Australia and the United Kingdom. That's despite India's withdrawal from Asia's largest multilateral accord in 2019 and its lack of interest in a Trans-Pacific Partnership so far.
The emphasis on one-to-one swift trade transactions is a U-turn for the Bharatiya Janata Party (BJP), which has previously been afraid of getting tied down to international deals and upsetting its loyal voting base of small businessmen. The stakes are high politically as Modi attempts to resurrect an economy devastated by the virus and entice more investment from the United States and its allies who see India as a counterweight to China. According to officials, the drive to close transactions quickly arises from the realisation that the window of opportunity to benefit from global supply chain realignment may be limited.
New Delhi is now negotiating bilateral trade agreements with 20 countries and aims to finalise half a dozen of them between Christmas and March of the following year, including those with Australia and the United Kingdom.