Latest News | FTAs Should Have Review Mechanism to Ensure Mid-way Course Correction: Par Panel

New Delhi, Mar 22 (PTI) Free trade agreements being negotiated by India should include the provision of a review mechanism to ensure mid-way course correction in case asymmetries are noticed in trade with the partner country, a Parliamentary panel has recommended.

The report of the Parliamentary Standing Committee on Commerce also said that India needs to leverage the 'China Plus One Strategy' for becoming an alternative investment destination for major global companies.

Also Read | Sony PS5 Restock in India: Gaming Console To Be Available for Pre-Booking on March 24, 2022.

The growing preference of firms located in major economies of Europe and the US to shift from China to other manufacturing bases provides a window of opportunity for India's trade sector, which needs to be capitalised, it said.

The committee has recommended that a policy measure to benefit from the strategy should be devised, which should incorporate steps to ensure a business-friendly environment and modern manufacturing infrastructure for the incoming investments.

Also Read | Maharashtra Government Orders Temporary Stay on NA Tax Recovery From Housing Societies in Mumbai Suburbs.

The government should endeavour to pursue Free trade agreements (FTAs) or preferential trade pacts with nations that seek to invest in India under the strategy, the report said.

"...the provisions of FTAs with partner countries should have an inherent review mechanism for ensuring mid-way course correction for any asymmetries in trade," it added.

It also said that FTAs should be concluded expeditiously to reap trade benefits.

Further, the panel called for the release of the forthcoming foreign trade policy (FTP) within the stipulated timeframe.

On India's exports, it said that decline in the outbound shipments in any sector should be dealt with a firm hand.

"The committee recommends that the department (of commerce) should identify the infirmities and opt for a more focused approach in increasing market access of the sectors that exhibit a downtrend in exports," it added.

On special economic zones (SEZs), the report said that imposition of minimum alternate tax and the introduction of sunset clause would adversely affect the competitive advantages of SEZ units.

"The committee recommends that the government should ensure the continuation of fiscal benefits and extension of a sunset clause to retain the competence of SEZ units," the report said, adding SEZs can be included under the ambit of Remissions of Duties and Taxes on Exported Products (RoDTEP) scheme.

It has expressed concerns over trimming export incentives like under the MEIS (merchandise export from India scheme).

The panel suggested "the extension of benefits of RoDTEP scheme to the sectors of pharma, organic and inorganic chemicals and iron and steel in order to retain their price competitiveness in global markets".

It also called for early clearance of pending dues under MEIS and SEIS.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)