“The government must review free trade agreements that are not beneficial to India.”

NEW DELHI: The Center must review free trade agreements with countries like South Korea and other ASEAN countries that have not been very favorable to India in terms of market access, Sanjiv Puri, president of the Confederation of Indian Industry (CII), said in an interview with this newspaper. However, at the same time, these trade pacts include: with the UK, EU, UAE and Australia have been very helpful for the Indian economy, he emphasized.

The Delhi-based Global Trade Research Initiative (GTRI) reported that India’s merchandise trade deficit increased significantly – by 302.9% with ASEAN countries and by 164.1% with South Korea. This comparison was made based on data from the pre-Free Trade Agreement (FTA) period (2007-2009) and the period 2020-2022. It is worth noting that India entered into trade agreements with these countries in 2010-2011. In the above-mentioned periods, India recorded a higher growth rate of imports compared to exports in trade with these countries.

Talking about the production-linked incentive (PLI) scheme, he said the scheme is feasible in sectors such as textiles and toys, given the proven success in new-age and some traditional sectors.

“PLI schemes exist in new age sectors as well as in some traditional sectors like food processing etc. Given the success, we can take lessons from them and construct them for labor intensive sectors as well and link them to the employment rate,” he added.

In response to a question on poor growth in the manufacturing sector, Puri said, “Thanks to all the policy interventions that have taken place in recent years, where we have good balance sheets in the financial sector, corporate balance sheets are better, corporate tax has come down, PLI schemes have been rationalized , free trade agreements – all this has given impetus to production and we see that it is heading in the right direction.”

“We must now build on this momentum, which will continue based on the right political measures. The next set of reforms will strengthen the competitiveness of the manufacturing sector, which involves reforms such as factor costs, land and labor, as well as building consensus on these issues. Then it’s about further making it easier to do business and making the ‘Make in India’ initiative more competitive,” Puri said.

At the same time, he expressed hope for revival in rural consumption due to favorable monsoon forecast.