India is working to negotiate and complete a business agreement with the United States, Rajesh Agrawal, a special secretary of the Ministry of Commerce, said on Thursday. Agrawal, who also conducts interviews on this proposed business agreement India-USA, said both countries hope to complete the first phase of the agreement this year (September-October). Before this, they are trying to complete the interim trade agreement.
He also mentioned that India had already signed more than 14 free trade agreements (FTA) with 26 countries.
“Now we are also integrating with the main markets … We have just concluded an agreement with the UK, we are at the advanced stage of negotiations with the European Union, we are trying to negotiate and complete the agreement with the US,” he said.
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India, he also said, negotiates trade contracts with Latin American countries, including Chile and Peru.
“We have done (commercial contract) with Australia and SAE. We are in negotiations with New Zealand. Now it is the idea that we are also very integrating with the main business partners around the world and the main economies … This will create huge opportunities for India to become part of global value chains,” he added.
“Our tariffs will be bilaterally reduced … People will be able to take long -term investment decisions based on this predictability of tariffs and regulatory landscapes … In this, logistics will also be the main determinant,” he said.
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Agrawal also said that the government was working to reduce logistics costs for industry in India.
Indian exports and imports have exceeded $ 1,150 billion, so “logistics is important”, he said logistics will play a key role in increasing the proportion of India in world trade in the coming years to 10 %.
Currently, the share is about 2 percent.
He also stated that the reduction of tariffs as a result of free trade agreements, harmonization of regulations and the effective logistics ecosystem supported the strengthening of global value chains (GVC) in the last 2-3 decades.
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Currently, 70 % of the Global Trade is powered by GVC.
“We integrated into GVC, but our participation in global value chains remains much lower than the main economy,” Agrawal said.
He added that as the nature of the goods changes with the developmental path of India, the importance of a strong logistics ecosystem will increase.
“One of the key traction factors today when we do any FTA with any country … A key request is a clear set of obligations about calming customs and trades, and it’s nothing but a smooth logistics ecosystem,” he said.
In the transport sector, a special secretary said that the transport lines are currently controlled by foreign players.
“We do not have much control of transport and air freight spaces … This leads to approximately 50 billion business deficits that we have in the service sector just for maritime,” he said, “It is unsustainable and also makes you vulnerable”.
He said he quoted Covid times, when the cost of transport increased several times, Indian exports influenced.
Whenever there is an international crisis or the Red Sea crisis, the first thing that suffers is that logistics costs are rising because it goes up for exporters.
“Whenever world logistics has restrictions, a country that has better control over logistics, tends to gain more than countries that do not have much beyond logistics.
“We have to focus on how we have the minimum level of control in the global logistics ecosystem, which is also necessary to support our international trade,” he added.
(With inputs from the press agency PTI)
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