The reasons behind India’s negative trade balance over the years are identified. To do so, a Bayesian network or belief network approach is employed to examine the inherent structure and conditional dependencies from the trade patterns of India’s exports and imports.
Views expressed in this article are solely of the authors and do not represent the views of the Reserve Bank of India.
It is argued that free trade agreements (FTAs) connote a gradual increment of regionalism with many countries in the world opting for trade agreements. Over the years, India has been very active in trade negotiations to diversify and expand the markets for exports and access raw materials, intermediates, and capital goods for overall value addition in domestic manufacturing. In the last two decades, the diversification strategy adopted by India in terms of markets and products has improved external trade to the gross domestic product (GDP) ratio above 40%.
Apart from reduction of tariffs and removal of quota, the key purpose of any FTA is to address the broader issues that hinder the flow of goods and services between parties while encouraging investment, cooperation, and following the best practices in terms of intellectual property, e-commerce, and government procurement. The world trading system is getting integrated to increase each country’s productive capacity and develop a technical know-how of the global market to access them. Broadly, trading arrangements are known by various names such as FTAs, preferential trade agreements (PTAs), regional trade agreements (RTAs), comprehensive economic cooperation agreement (CECA), and comprehensive economic partnership agreement (CEPA).
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A Different Perspective to Better Negotiate Free Trade Agreements
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01.03.2024
The reasons behind India’s negative trade balance over the years are identified. To do so, a Bayesian network or belief network approach is employed to examine the inherent structure and conditional dependencies from the trade patterns of India’s exports and imports.
Views expressed in this article are solely of the authors and do not represent the views of the Reserve Bank of India.
It is argued that free trade agreements (FTAs) connote a gradual increment of regionalism........
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