India-UK Comprehensive Economic and Trade Agreement (CETA)
The signing of the India-UK Comprehensive Economic and Trade Agreement (CETA) marked a pivotal moment during the prime minister’s visit to the UK. This agreement symbolizes a strengthened partnership between India and the UK, highlighting its future potential and addressing contemporary challenges affecting India’s security and integrity.
Significance of CETA
- Ambition and Coverage:
- CETA is designed to go beyond WTO-mandated areas, fostering stronger economic ties through comprehensive commitments and policy harmonization.
- Landmark Agreement:
- It is India’s first comprehensive agreement with a major Western partner, serving as a template for future agreements, including with the EU.
- Historical Context:
- The agreement signifies a shift towards bilateralism and regionalism amidst the erosion of the multilateral trade regime.
Global Trade Dynamics
- US Trade Policy:
- The US has moved away from the WTO framework, focusing on trade hesitancy and protectionism, a trend accelerated under President Trump.
- Impact of Globalization:
- The recent wave of globalization has shifted economic power to Asia, especially China, leading to geopolitical and economic realignments.
- Challenges and Opportunities:
- Issues such as the Covid-19 pandemic and geopolitical tensions have exposed vulnerabilities in global supply chains, prompting calls for reshoring and industrial sovereignty.
India’s Trade Strategy
- Bilateral Agreements:
- India prefers bilateral agreements for better management and alignment with domestic policies, learning from past experiences with ASEAN, Japan, and Korea.
- Future Prospects:
- Comprehensive FTAs are essential for integrating into Global Value Chains (GVCs), which are crucial for industrialization and export growth.
- Strategic Engagement:
- India must revisit and enhance existing agreements with countries like Japan, Korea, and Singapore for better access to critical inputs and resources.
In conclusion, CETA and similar agreements are pivotal for India’s strategic economic engagement, serving both geopolitical and economic imperatives in a rapidly changing global landscape.
