They were speaking at a session titled “India’s FTAs: Sectoral Implications and Emerging Opportunities” during the FTA Conclave Gujarat organised by The Secretariat in Gandhinagar. 

The session was moderated by Ravi Shah, Partner Cyril Amarchand Mangaldas. The panellists were R.P. Sharma, Professor and Head, Indian Institute of Foreign Trade (IIFT) - Gandhinagar; Rahul Ahluwalia, Founder Director, Foundation for Economic Development (FED); and Tapan Mazumdar Former Additional Director, Directorate General of Foreign Trade (DGFT).

Here are some key highlights of the session.

R.P. Sharma

Sharma advised exporters to find the right product-market fix, instead of trying to force their product in all export markets. “We have many FTAs, but exporters cannot sell everywhere. Choose a market with higher product value. Across sectors, whether they are engineering, pharma, textiles, or any other, products must have a value proposition,” he said. 

Sharma also strongly suggested the creation of a strategic business plan around a selected market as tariff alone could not be the guiding factor and exporters could face major risks. 

He explained that while the current strategy involves selling commodities, it should evolve to creating brands. “Say leather is exported from India, but in Italy it is branded and labelled, which increases its value manifold. Beyond commodities we need to sell branded products leading to higher unit value realisation,” he suggested. 

He asked exporters to come to IIFT, which has a large database and could enable exporters take informed decisions. 

Rahul Ahluwalia

Ahluwalia advised exporters to make full use of the labour reforms initiated by the Indian government. “The government of India has passed new Labour Codes, which gives states the flexibility to revise Codes and remove constraints. This can be a huge fillip to create jobs. Bangladesh exports US$ 47 billion worth of garments, which means huge jobs. Gujarat has a better business environment than Bangladesh,” he said. 

Labour intensive exports from India, like apparel and textile, which have performed poorly, are getting substantial tariff cuts in the new FTAs. A lot more partnership opportunities and platforms exist to enable exporters get a higher value share. “In the apparel and garment sector, the EU market is worth US$ 330 billion while the US market is worth US$ 130 billon,” Ahluwalia said.

Tapan Mazumdar 

“Developed markets will not change regulations, exporters need to adapt fast. In the India-EU FTA, India has sought relaxation on CBAM (Carbon Border Adjustment Mechanism). Indian exporters need to get certifications and meet standards faster,” Mazumdar said. 

He also drew attention that in developed countries, tariffs are already low, so the biggest issue with them is non-tariff barriers. He also differentiated between the non-tariff barriers and non-tariff measures and cited that in Australia, according to rules, the medicine should be sold at 50% price of the patented drug and every year the price should come down.

He advocated common testing requirements among FTA partners, avoiding multiple tests, which increase time and cost. “In the India-EU FTA, we are likely to get some concession in fisheries,” he said. 

Some ‘Rules of Origin’ provisions treat a product produced in multiple FTA partners as produced in one country, he pointed out. He also advocated priority treatment to services, which was not the case in FTAs with Japan, South Korea, and the Association of Southeast Asian Nations (ASEAN). 

India had close to US$ 826 billion of exports last year. He also the ruled out the necessity to liberalise old FTAs like the one with ASEAN.