GREATER NOIDA: Asian Development Bankhas advocated for consolidation and multi-lateralisation of Free Trade Agreements(FTAs), which India has with many nations, for better efficiency and realisation.
"Consolidation is one way of going about it... Final result can be achieved through multi-lateralisation of these regional trade agreements," ADB Lead Economist (Trade and Regional Cooperation) Jay Menon said at media conference here.
"Consolidation involves compressing bilateral FTAs into a broader region-wide FTA where intra-regional bilateral FTAs become redundant.
"Multi-lateralisation grants non-discriminatory preferences to non-members, eliminating any margin of preference. Of the two approaches, multi-lateralisation would be ideal," he said.
Citing an instance, he said ASEAN is a good example of how multi-lateralisation can work.
Currently, India has 13 FTAs in force, and it is also negotiating many other such agreements with various countries and regional association across the world.
He also said the utilisation rate of such FTAs varies between 5 and 25 per cent.
The consolidation of FTAs will help in enhancing utilisation rate, he said, advocating that countries should not enter into trade pacts without strengthening their domestic industry.
"One of the reasons why India has not been able to gain from FTAs is because it entered into trade liberalisation without strengthening its domestic industry. Problem does not lie behind the border, but inside the border," he said.