India is expected to progress on free trade agreement negotiations with several countries, including Russia, in 2024
New Delhi is poised to sign free trade agreements (FTAs) with various countries in 2024, which is driven by their interest in tapping into India’s “large and rapidly growing market,” according to a report by the Global Trade Research Initiative (GTRI).
The report, titled ‘India FTA Outlook 2024,’ highlights these countries’ motivation to establish trade agreements with India, primarily stemming from the challenge posed by high import duties hindering their access to the Indian market.
“By forming FTAs with India, they can access the Indian market without these import duties on substantial trade. This gives their companies an advantage over others in selling to the Indian market,” observed the report.
Negotiations for trade agreements are underway between India and several key economies, including the UK, US, EU, Switzerland, Norway, and the Russia-led Eurasian Economic Union (EAEU). The report suggested that India “may have completed or [is] nearing completion” of these agreements with all major economies, excluding China, by the year’s end.
GTRI noted that India currently maintains a “comprehensive” FTA relationship with 22 countries and has agreements with 49 more countries in the pipeline. Upon successfully signing and implementing these FTAs, the report anticipates that India will have trade agreements with 71 countries, covering a substantial portion of India’s exports amounting to US$337 billion, equivalent to 74.7%.
However, the report dismisses the likelihood of a surge in India’s exports to these countries currently negotiating FTAs, as many already impose low import duties. It concluded by emphasizing that India’s path forward in negotiations “requires strategic planning, adaptability, and a focus on improving the quality of Indian goods for the global market while safeguarding domestic interest.”
Last week, a report in Business Today suggested that India is actively working to finalize FTAs with the UK, Oman, and a European bloc consisting of Iceland, Liechtenstein, Norway, and Switzerland before the upcoming national elections. “Negotiations are on at full speed with the aim to conclude all three agreements by the end of January and latest by February,” a person familiar with the development told the outlet.
Challenges, mainly related to market access for liquor and automobiles, have arisen in the negotiations with the UK. According to media reports, the 14th round of talks between the two sides will occur later this month. Last week, the Daily Express newspaper reported that Indian Prime Narendra Modi and his UK counterpart Rishi Sunak are eager to close the deal by April.
In a separate development, India’s FTA negotiations with Canada have been put on hold after diplomatic tensions escalated due to Ottawa linking Indian government agents to the murder of a Sikh activist near Vancouver. On the other hand, New Delhi has expressed its intention to resume FTA talks with the Eurasian Economic Union, comprising Kazakhstan, Kyrgyzstan, Armenia, Belarus, and Russia, this month, with the potential to expand India’s market access to Russia and CIS countries.
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