Govt Urges Industry To Use FTAs, Diversify Exports And Build Resilient Supply Chains

The government on Thursday nudged the industry to utilise free trade agreements (FTAs), focus on value addition, build resilient supply chains, and actively diversify export markets to boost manufacturing and strengthen the country's position in global trade.

All trade agreements which India has signed "is a door, but doors, however magnificently crafted, do not open themselves. It is the industry that must walk through them," said Additional Secretary in the Department of Commerce Yashvir Singh.

He said the industry should use FTAs to expand market access, attract investment and technology, diversify supply chains, and build manufacturing ecosystems that can withstand global shocks.

The ambition is not merely to participate in global manufacturing but to make India a reliable, competitive, and trusted partner in global value chains, he said said at a manufacturing conclave.

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"I place before this audience five imperatives, not suggestions, but strategic obligations. First, invest in FTA utilisation. Understand the rules of origin requirements. Map your supply chains to qualify for preferential tariffs. The duty savings are real. The competitive advantage is immediate," he said adding "move up the value chain".

The share of capital goods in India's export basket has already risen from 13 per cent in 2014 to 19 per cent today, but that trajectory must be accelerated, he said.

He also called for building supply chain resilience as China's concentration in upstream materials is a risk for the world.

"For India, it is also an opportunity. Invest in critical minerals, in API (Application Programming Interface) manufacturing, in domestic electronic components. Every supply chain we secure is a choke point we neutralise. Fourth, diversify markets actively," Singh said.

India's trade pacts with Oman, New Zealand, and Mauritius have opened corridors in the Gulf, Oceania, and East Africa that were earlier inaccessible on preferential terms.

"Fifth, engage on standards. The country that rides the technical standards owns the market. India must move from being a standard taker to a standard setter. UPI, ONDC, and BharatNet are early signals of what sovereign standards can achieve," he said adding now industry must build the scale.

Let us not be China plus one. Let us be India, the trusted partner, the resilient manufacturer, and the next great engine of global growth".

Talking about global uncertainties, he said restrictions on critical minerals are being weaponised, technology choke points are being deliberately engineered and trade is no longer just an economic instrument.

"It has become a tool of geographic statecraft. The consequences of this shift are visible most clearly in the global concentration of manufacturing and critical supply chains," Singh said.

China today dominates large segments of critical mineral processing and refining, including rare earths, graphite and magnesium. Materials which are foundational to clean energy systems, advanced electronics and defense manufacturing.

One country concentration has become the biggest economic security risk of these times, he said.

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"So the western response, the US Chips Act, the Inflation Reduction Act, the EU's carbon border adjustment mechanism is the most sweeping turnaround state-directed industrial policy in half a century. The era of frictionless, ideology-neutral free trade is over. What has replaced it is what I would call 'Vyaparik Rashtravad' -- commercial nationalism -- where every trade instrument is simultaneously an economic tool and a geopolitical weapon," he said.

India offers supply chain sovereignty, resilient, transparent and ethical supply networks and this rests on the country's democratic institutions, enforceable contracts, world-leading digital public infrastructure, young skilled workforce, growing green manufacturing, and access to one of the world's fastest-growing consumer markets, he added.

In a separate session, Additional Secretary in the department, Darpan Jain, said FTAs have become important for trade and it is not an option but a necessity.

"It has a number of advantages and that include preferential terms, and investments," he said, adding that the eight trade pacts finalised by India in the last few years provide access to markets with a combined GDP of USD 56 trillion, while those countries import goods worth USD 12 trillion.

He also said the department has laid out a detailed roadmap to increase awareness about these agreements.

Indian Institute of Foreign Trade (IIFT) Vice-Chancellor Rakesh Mohan Joshi said that FTAs have made Indian goods competitive and now industry should tap into these opportunities.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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