India to gain more from FTAs in long term: Rao
New Delhi: India will benefit more in the medium-to-long term from Free Trade Agreements (FTAs) with other countries which will have some edge initially though, a top official in the Commerce Ministry said.
"In short term, initially it is our partners who will be able to gain more...In the medium to long term, Indian industry (would) become more competitive in those markets...," Commerce Secretary S R Rao told a news agency.
India has so far implemented free trade pacts with countries like Singapore, Korea, Japan, Malaysia and Asean. The country is negotiating similar pacts with several nations include Australia, Canada, European Union and New Zealand.
Besides several experts, apex exporters body FIEO have said that exports to several countries with which India has signed FTAs have shown a decline trend.
India's imports from Japan, with which it implemented a comprehensive free trade agreement in 2011, increased by over 3 percent to USD 12.5 billion during the last fiscal.
Similarly, the country's imports from Malaysia grew by 9 percent to USD 10.43 billion in 2012-13, from USD 9.55 billion during the previous fiscal.
The country's exports to Japan declined to USD 6.26 billion during the last fiscal, from USD 6.32 billion in 2011-12.
On declining exports to FTA countries, Rao said "it will take time for us to be able to do more (exports) in these countries".
He also said that the government continuously take inputs from all stakeholders to take advantage of the free trade pacts and enhance the country's exports.
"We keep on reviewing (the FTAs)...In these we do prior stakeholder consultations to understand as to what further things need to done to further enhance our exports," he added.
Elaborating on the advantages accruing from the FTAs, the secretary said that during the initial phase India's partners got more benefit because domestic tariffs were high as compared to the trading partners.
"Initially, the FTAs which we have had with most of the economies, Indian tariffs were much higher...So when India drops the tariffs, essentially their (partner country) exports will become more competitive, that is how their (partner country) trade goes up," Rao said.