Articles by Smitha Francis

India's recent overlapping comprehensive trade agreements, which combine accelerated goods trade liberalisation with deeper and wider liberalisation in agriculture, "investment" and services, have wide ramifications on her development despite the extent of liberalisation that the country has undertaken over the last two decades. It is argued that the growing trade deficit and the changed nature of recent foreign direct investment inflows already throw up industrial policy and financial regulatory challenges before India for developing dynamic competitiveness and reducing financial fragility in the economy. The investment provisions in the recent comprehensive trade agreements compound the dissonance between India's development needs and industrial and macroeconomic policies by putting World Trade Organisation-plus constraints on the country's regulatory ability.

Under the asean-India Free Trade Agreement, the trade bloc's members will have increased access to the Indian market for semi-processed and processed agricultural products and close substitutes, which could adversely affect the country's agricultural sector. Indian small and medium enterprises in food and other agriculture-related products, some intermediate goods, and light manufacturing products are also likely to suffer. But import liberalisation in intermediate goods will encourage multinational corporations to undertake production rationalisation across the region in the transport equipment, machinery, chemicals and iron and steel sectors. This could lead to India's deeper integration in production networks in such sectors. All this, combined with the neglect of the development needs of domestic agriculture and a manufacturing base for the expected gains in service sector liberalisation with asean, is likely to make India's employment and livelihood issues even more challenging.