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India should be cautious in FTAs says Jairam Ramesh

Written by: Staff

New Delhi, Apr 10 (UNI) Minister of State for Commerce Jairam Ramesh today said India should be cautious with regard to textile and agriculture while negotiating Free Trade Agreements (FTA) with ASEAN and others as a large numner of commodities were of a sensitive nature.

In an interactive session with the the Forum of Financial Writers here, Mr Ramesh also did not think that it would be wise on the part of the government to ''indiscriminately'' sign FTAs with a host of nations and regional blocs, including ASEAN.

''FTAs bring macro benefits, but micro pains. While there was macro economic benefits of entering into an FTA, there could be serious problems of adjustments relating to various commodities and regions.

''India cannot go on the Chinese route as far as FTAs are concerned, because of agriculture. An improvement in the infrastructure for agricultural products like pepper, tea, coffee, edible oils, was needed as India has long-term competitive advantage,'' Mr Ramesh said.

He retorted that FTAs are being ''looked upon as an instrument of political influence plus as a means of telling the world India has changed and is not what it was in the past,'' and added that competitive advantage is not 'God-given' but has to be engineered.'' Mr Ramesh also felt that the advantages of an FTA should not be perceived strictly in economic terms as it also gives India political clout in the international arena.

Giving examples, he said Singapore was the most vociferous proponent of the recently held east Asia summit in Kuala Lumpur as it has an FTA agreement with India.

The Minister alluded to the fact that not all decisions should be viewed in terms of economic advantages they offer. ''The nation has to pursue other goals as well,'' he said.

He said, ''the Green revolution would not have come through if it was seen mainly from an economic angle.'' Meanwhile, while speaking on the foreign trade policy of the country, the Minister said. ''There needs to be a paradigm shift from dollar fixation to job fixation, incentives to infrastructure and concessions to competitiveness.'' He also underlined the need for ''using exports as an instrument for regional development, as exports are linked to the prosperity of many towns,'' and added ''International trade adds to local development. It also can be used for diffusing prosperity to the entire country.'' While urging improvement in the infrastructure and production of various commodities, Mr Ramesh said, ''trade is global but the impacts are local.'' UNI RA/SBJ SR HS1859

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