Use FTAs to build joint ventures, explore investment opportunities: CII President to industry

The CII's call to action highlights a strategic shift in how India should approach international trade. Historically, Indian FTAs have sometimes faced criticism for leading to an inverted duty structure or increased trade deficits. However, the current emphasis is on utilizing FTAs not just for market access for goods, but as instruments for foreign direct investment (FDI), joint ventures, and integration into global value chains (GVCs). By actively engaging with partners like the UAE, Australia, and the European Free Trade Association, and pursuing agreements with the UK and the EU, India seeks to attract capital and technology. This strategy aligns with domestic initiatives like the Production-Linked Incentive (PLI Scheme), which aims to boost domestic manufacturing capabilities and export competitiveness. The goal is to move from simply exporting finished goods to becoming a crucial node in international production networks, thereby creating jobs and driving sustained economic growth of over 7%, as highlighted by the CII.

The emphasis on collaboration in emerging technologies such as Artificial Intelligence (AI) underscores the evolving nature of global governance and trade. The CII President's mention of the government's commitment to 'Making AI in India and Making AI Work for India' points to the need for a robust regulatory framework that balances innovation with safety and ethics. International cooperation in cybersecurity, data protection, and responsible AI governance is crucial, as these issues transcend national borders. The development of interoperable digital payment systems, championed by India through platforms like the Unified Payments Interface, is presented as a tool for facilitating seamless cross-border transactions and promoting global financial inclusion. This reflects India's ambition to position its digital public infrastructure as a model for global adoption, thereby enhancing its soft power and influence in international economic governance.

The push for FTAs and international collaboration must be viewed through a geopolitical and geographical lens. The CII notes that the global economy is at a 'critical juncture' due to geopolitical tensions and elevated energy prices. In this context, building resilient supply chains is a strategic imperative. The call to diversify energy supplies and collaborate on critical minerals (essential for the transition to renewable energy and advanced manufacturing) reflects a growing awareness of resource vulnerabilities. India's reliance on non-fossil sources, which now account for over 50% of installed electricity capacity, necessitates international partnerships in transmission infrastructure, battery storage, and solar manufacturing. Similarly, strengthening cooperation across agricultural value chains to ensure reliable supplies of fertilizers and critical inputs is vital for domestic food security in a volatile global environment. FTAs are thus seen as tools to secure vital resources and build strategic partnerships beyond mere commercial exchange.