Sri Lanka, Thailand benefit more from FTA with India
Sri Lanka, Thailand benefit more from FTA with India
ECONOMY BUREAU
Saturday, February 04, 2006
NEW DELHI, FEB 3: With India signing Free Trade Agreements (FTAs) with Sri Lanka (1998) and Thailand (2004), its imports from these two countries have gone up by over 300% and 125%, respectively, between 2002-03 and 2004-05. India’s exports to Sri Lanka rose by about 47% and that to Thailand by 19% during the same period.
India’s exports to its non-FTA partners like Bangladesh, Bhutan, Myanmar and Nepal also went up substantially, according to an analysis by Assocham. The analysis, titled ‘India’s Trade with BIMSTEC Countries’, has been based on the latest available trade figures obtained from the Ministry of Commerce and Industry.
While India’s exports to Sri Lanka was to the tune of $920.98 million in 2002-03, it rose to $1355.23 million during the last fiscal (2004-05). In the case of Thailand, exports jumped to $879.56 million in 2004-05, as against $711.20 million in 2002-03.
ASSOCHAM has pointed out that countries like China, Philippines, Malaysia, Indonesia and even Taiwan used Sri Lanka and Thailand as ‘convenient destinations’ to dump their products in India under the garb of FTAs. Due to this, Sri Lankan exports to India grew from $90.83 million in 2002-03 to $364.39 million towards the end of 2004-05.
According to Assocham analysis, exports of Sri Lankan edible oils to India-as a result of the FTA -shot up disproportionately, especially because Sri Lanka has nil import duty on edible oils. Sri Lanka enjoys the cost benefit over locally manufactured Indian Vanaspati and, despite the quota restrictions, there are illegal imports as well, points out the analysis.
Meanwhile, China, the Philippines, Malaysia, Indonesia and even Taiwan discreetly used neighbouring Thailand as a preferred destination to route into India their products in sectors like textiles, engineering, processed food products and electronics.
India’s exports to Bangladesh, Bhutan, Myanmar and Nepal too show marked improvement. India’s exports to Nepal, which stood at $350.36 million in 2002-03, rose to $743.03 million in 2004-05.
Finally, the analysis suggests that India should take precautionary measures before signing FTA with countries like Bangladesh, Bhutan and Myanmar so as to maintain surplus trade balance with these countries and its hegemony in the Bimstec region.
