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The Economic Survey for 2019-20 has pointed out that generally Free Trade Agreements have been beneficial for India. Explain the underlying reasons and discuss what should be the way ahead to change this experience into a positive outcome.

 

Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

4.The Economic Survey for 2019-20 has pointed out that generally Free Trade Agreements have been beneficial for India. Explain the underlying reasons and discuss what should be the way ahead to change this experience into a positive outcome. (250 words)

Reference: The Print

Why this question:

The Economic Survey for 2019-20 has pointed out that generally FTAs have been beneficial for India. Between 1993 and 2018, India’s exports of manufactured products grew at an annual average of 13.4% to partners with which it has trade agreements and such imports grew 12.7%, it says. In comparison, its overall goods exports grew at an average of 10.9% and imports 8.6% during this period.

Speaking at an online interaction, the External Affairs Minister said era of multilateralism is over, and there are ways of engaging with the world that are not FTA-centric.

Key demand of the question:

India signed a series of Free Trade Agreements (FTA) in Asia that came into force in the 2000s. Across industry and policy-makers, a view has emerged that these FTAs have not served India well, and even actively damaged Indian industry. Thus one has to analyse in detail the aspects of FTAs with respect to Indian economy.

Directive word:

Explain – Clarify the topic by giving a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.

Structure of the answer:

Introduction:

  • In brief define what FTAs are and present the views of the Economic Survey 2019-20 about the same.

Body:

Explain in what way the success of an FTA should be judged against its objective of enhancing trade.

Discuss the factors responsible for such an effect and also suggest what steps should be taken to ensure better realization of the FTAs.

Conclusion:

Conclude with way forward.

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