Restricting Third Country Imports

Over the past two decades, India has signed a series of free/preferential trade agreements (FTA/PTA) and economic partnership agreements (EPA), to leverage foreign trade as an engine for promoting economic growth, employment generation, foreign exchange accumulation, trade expansion, and diversification and to effectively exploit available economic resources for speeding up the process of socio-economic development. The Directorate General of Foreign Trade (DGFT), vide its appendices 2A vide 10 free trade agreements and six preferential trade agreements already signed, offers reciprocal market access with lowering of tariff and non-tariff barriers except one non-reciprocal, generalised system of preferences (GSP). These trade agreements have not resulted in economic gains as per the expectations of the policymakers as well as domestic industry. It is widely believed that trade distorting tactics are used by other countries to flood the Indian markets with their goods (Saraswat et al 2017). India has witnessed a growing trade deficit with FTA/PTA, EPA partners, thus creating a fear of concluding new agreements and also provoked it into taking corrective and preventive measures to address the concerns of the trade community on violation of established norms of rules of origin (RoO) and resultant increase in imports and trade deficits (Ghosh et al 2018).

Need for New Rules