Proposals for Trade Policy Overhaul: A Focus on Equitable FTAs and Domestic Industry Support

Amidst discussions surrounding the revisitation of India’s Free Trade Agreements (FTAs) with ASEAN, Japan, and South Korea, the Parliamentary Standing Committee on Commerce emphasizes the need for equitable terms, particularly in the steel sector. Until such terms are achieved, the Committee proposes the suspension of concessional tariffs with these nations.

Highlighting a disparity in concessions, particularly with ASEAN, the Committee advocates for periodic assessments to ensure compliance with Rules of Origin. This would mitigate the risk of market access at reduced tariffs for non-FTA countries. Additionally, the Committee recommends enforcing mandatory domestic content labeling throughout the value chain.

In the realm of electronics, the Committee urges governmental support to shield domestic industries until they attain global competitiveness. It also advises tying foreign investment in electronics manufacturing to infrastructure investment and technology transfer, fostering the production of critical components domestically in the long run.

Expressing concern over the nation’s industrial performance, the Committee proposes reducing GST on vehicles and auto components to 18% from 28%, alongside introducing incentive-driven vehicle scrappage programs. It calls for streamlined regulatory processes, subsidy incentives, and cheaper utilities for API parks.

Regarding land issues, the Committee suggests forming an Empowered Committee to address land acquisition challenges and enact consensus-based land reforms. Digitization of land records and simplification of administrative procedures are also recommended.

Identifying administrative hurdles, credit constraints, and infrastructure inadequacies as key challenges, the Committee stresses the importance of attracting foreign investment. It advocates for strategic international trade agreements to bolster the country’s trade relations.

Concerning the influx of Chinese toys impacting domestic industries, the Committee underscores the significance of nurturing domestic toy manufacturing, proposing concerted efforts in this regard.