Union Commerce Minister Nirmala Sitharaman on Wednesday said India is reviewing the Free Trade Agreements signed with its trading partners following concerns by domestic industries about the benefits of these pacts for them, dna reported. Sitharaman said the central government was reviewing the deals "along with industry sectors".
Reasons such as the lack of awareness regarding the trade deals had led to Indian industries not being able to "fully exploit the FTAs to their favour", the minister said. According to her, India was not being able to "leverage its strength" in pacts such as the one with the 10-nation Association of South-East Asian Nations.
Sitharaman further said that the country’s farmers and traders are not yet ready for foreign direct investment in multi-brand retail trading because of logistical and financial issues, the Business Standard reported. Factors such as last-mile connectivity, infrastructural support at the back-end as well as the financial inclusion of farmers and traders need to be addressed first, she said. India will be able create “several Walmarts of its own” if it resolves these issues, the minister said.
Current rules in India’s FDI policy allow foreign players to hold a 51% stake in domestic companies. However, the Bharatiya Janata Party has opposed FDI in multi-brand retail trading, even as it has approved 100% foreign investment through government approvals in sectors such as e-commerce. New Delhi has also implemented FTAs with countries such as Japan, Korea and Singapore. It is also negotiating similar agreements with nations and blocs such as Australia, Canada and the European Union. Sitharaman in July also said that India and the United Kingdom are considering the possibility of an FTA following the latter’s vote in June to exit the EU.
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