Why India Is Suddenly On An FTA Signing Spree

Long known as a slow negotiator, India is suddenly on an FTA signing spree

- K. Sunil Thomas And Rekha Dixit

After playing coy with a few suitors and ditching one at the altar, India has now gone in for a makeover with a vengeance. In the free trade agreement (FTA) sweepstakes, it is playing the field and hooking up with as many as possible.

2022 is not even halfway through, yet India’s trade diary is chock-a-block with promising dates. The FTA with the UAE came on effect on May 1. A few days earlier, the early harvest FTA with Australia was sewn up. An agreement with Israel is almost sealed; another with the Gulf Co-operation Council (a union of the oil-rich Persian Gulf states) is next. The buzz is that the Saudis and Omanis would not mind separate bilateral deals. An over-enthusiastic UK, now that Brexit is over and done with, is pushing New Delhi to do the deed before Diwali. India has also pulled out its half-forgotten dalliance with the European Union, as fresh overtures were made recently.

Then, there is the ‘will they, won’t they’ playing out with the big bro, the US. Anything from Alphonso mangoes to duties on Harley-Davidson bikes can lead to a tiff here, but in the post-Trump era, there are renewed expectations of a ‘sauda pakka’. Waiting in the wings are many others, from Canada to South Africa.

For the first half century of its existence as a free nation, India barely had any multi-country trade deals. Even in the past two decades, it was a tough and slow negotiator, with most talks ending up in limbo. So what has changed?

“India always wanted multilateral trade agreements so that it facilitates trade across the globe. It was not initially enthusiastic about bilateral or regional trade agreements, but it gradually realised that many countries were doing it and India was being left out,” said Sunil Sinha, principal economist at India Ratings and Research.