According to a World Trade Centre Mumbai research paper, these 21st-century issues, such as labor protection, environment protection and ecommerce, will be major drivers for global supply chain and exports. This could put Indian negotiators to the test in 2022 when they try to reach mutually beneficial deals with major trade partners such the UK, EU and the US.
India is preparing to negotiate a trade agreement with the US. The issue of unrestricted cross-border data movement will be raised. India needs a very nuanced negotiation strategy that strikes a right balance between cross-border transfer and privacy of Indian citizens.
The US Trade Representative Katherine Tai identified India’s restrictive digital trade policies, including data localization policy, as one of the main barriers to trade during her India visit earlier in the year.
India should align its data privacy and data protection regime with other prominent jurisdictions, such the US and EU, as 66% of our services exports consist of digitally delivered services like ICT services (including BPO and KPO), the paper stated.
Tai also made a strong case for including labour issues into the trade talks. India, however, was able to resist this pitch for now.
The paper suggested that India may have to negotiate with the EU for concessions for Indian exporters, in order to meet their stringent labour and environment protection norms.
While India and the EU have decided that they will relaunch the negotiations on a bilateral trade agreement, they are still trying to determine how to deal issues such as environment and labour. The EU maintains that its Parliament will not allow a trade agreement where these issues are not addressed, but India insists that environment and labour are not trade-related.
The EU will also impose a carbon tax to discourage imports of products made through environmentally harmful processes. The paper stated that this move will have an impact on India’s exports of engineering goods, auto-components, and other goods. The EU is a major destination for these goods.
India should forge trade deals to its major trading partners, as it is not part a major trade agreement that is being formalised around this world like the Comprehensive and.
Progressive Agreement for Trans-Pacific Partnership. It involves 11 countries, including Australia, Japan, Canada, and Mexico.
India’s biggest concern is that mega trade agreements could reduce India’s share of world exports. This is because our competitors will be able to integrate more into global value chains as a result of these agreements. The paper noted that India already has a declining market share in developing countries.