The Asian Development Bank (ADB) told that the country had nothing to fear from the Free Trade Agreements (FTAs) as it has come a long way in trade liberalisation after declaring that the time was ripe for India to internationalise its production capacities and trade,
‘The Indian economy has matured and trade liberalisation had deepened its roots. It was time for India to internationalise its trade,’ Dr Jayant Menon, Lead Economist (Trade and Regional Cooperation) Office of Regional Economic Integration told newspersons on the sidelines of the 46th Meeting of Board of Asian Development Bank here.
Dr Menon told that the ADB was of the view that internationalisation of production and trade was better than FTAs as many of the complexities relating to bilateral trade agreements in a free trade framework did not occur in the case of multilateral trading arrangements. In this regard he cited the rules of origin as a case in point.
The ADB economist said the next stage to the FTAs was multilateral trading arrangements, but warned that a country should open up to free international trade only if it was prepared domestically.
Asked whether the Indian industry and the economy were prepared for facing free international trade, Dr Menon said domestic industry had matured to enable it to face global competition.
Questioned as to why there was a surge in imports as compared to an increase in exports, Dr Menon said this had to do with issues like trade facilitation and interstate restrictions.
Dr Menon said countries need to avoid imposing non-tariff barriers, such as bureaucratic hurdles in the way of imports.
He commended the ASEAN arrangement, saying there was little trade among them, but the Group in its entirety had internationalised its trade.
Dr Menon said a country had to be careful while opening up either to trading arrangements regionally or globally in areas like agriculture.