India seeks to expand markets with EU deal
India and the European Union (EU) have formally relaunched negotiations over a free trade agreement after a nine-year impasse, with the aim of finalising a deal by the end of 2023.
India’s Commerce and Industry Minister, Piyush Goyal, said that the India-EU trade pact can help unleash significant untapped potential.
He said: “There is no doubt that reaching a free trade agreement is of great economic significance to India and the EU but this negotiation is far from being as easy as it seems. India and the EU started trade talks in 2007, but they stalled in 2013 as both sides failed to reach an agreement on key issues, including customs duties on automobiles and the movement of professionals.”
The two sides are looking to have trade negotiations that are “broad-based, balanced and comprehensive”, Goyal said.
According to The Hindu newspaper, the EU is seeking to sell more products into the Indian market, so barriers to access the market that are impeding trade are expected to be a crucial part of the negotiations.
India has become more open to lowering trade barriers in recent years and is negotiating agreements with several countries, including the UK. India signed a major trade agreement with the UAE in February and an interim free trade agreement with Australia in April. Overall, these trade talks are key to further opening up India’s economy.
The Hindu commented: “India’s moves in expanding trade deals further show that the country seems to be only interested in building its own trade and industrial supply chains. For example, India opted not to join trade pacts promoting regional trade facilitation, such as the RCEP [Regional Comprehensive Economic Partnership, a free trade agreement involving 15 Asia-Pacific region countries].
“A piecemeal opening approach, which is admittedly beneficial to India’s economy to some extent, also means that it will be more difficult to continue to move forward in the opening process. In fact, a higher level of openness will help its pursuit of becoming a global manufacturing powerhouse and occupy a better position for cooperation with the industrial supply chains in Asian economies.
“For India, integrating into regional development is not in conflict with upgrading of its own manufacturing capacity. It is beneficial for both its foreign trade and domestic industries if India chooses to integrate into the Asian industrial supply chain and deepen cooperation with economies like China, Japan, South Korea and ASEAN.”
New unemployment figures published
India’s unemployment rate has fallen from 5.8% in 2018-19 to 4.2% in 2020-21, according to the Government of India’s Periodic Labour Force Survey for 2020-21.
The number of people in the workforce has increased during the same period, from 35.3% to 39.8%, demonstrating a rise in the number of people in the working-age population actively looking for work.
In an editorial comment the Telegraph Online (India) said: “These two statistics ought to be good news — more people seeking work and more people actually landing jobs. A little probing, however, reveals that all may not be fine as far as jobs and incomes are concerned.
“During the period between 2018-19 and 2020-21, the proportion of workers in the salaried class with regular wages and benefits fell from 23.8% to 21.1%. The proportion of casual workers with regular pay but no benefits also fell from 24.1% to 23.3%.
“On the other hand, the proportion of the self-employed, which includes small vendors and people working without any income for a family enterprise, increased from 52.1% to 55.6%. “Within the self-employed category, there has been a sharp rise in the proportion of household helpers and unpaid women workers — from 13.3% to 17.3%. The definition of being employed is set at 30 days of work in the past 365 days, or in an alternative measure, as having more than one hour’s work in the preceding week. These measures hardly conform to perceptions of having a steady job with a regular income.”