India plans to hold FTA talks with UK, EU, Canada on G20 sidelines
- 18 Aug 2023
India plans to hold bilateral free trade talks with the United Kingdom, the European Union and Canada and discuss bilateral trade issues with the Russian delegation on the sidelines of a G20 meeting next week, a top trade official said on Friday.
The G20 trade ministers are likely to discuss trade and World Trade Organisation reforms in their meeting, trade secretary Sunil Barthwal also told reporters.
More than 300 delegates from G20 members are to gather in Jaipur, about 300 km from the capital New Delhi, for the Aug. 24-25 Trade and Investment Ministerial meeting.
The Trade and Investment Working Group was set up in 2016 under the Chinese G20 presidency and has continued to hold talks on related issues at subsequent meetings.
“WTO reforms is one of the priority issues at G20,” the official, said noting that the agenda for the G20, who account for nearly 85% of global GDP, will include the role of logistics in expanding global value chains and small businesses.
Among others, France, Indonesia, South Korea, Turkey, UK, USA and EU have confirmed their participation in the meeting.
The trade ministers are likely to aim to build a consensus on the issue of reducing transaction costs through a paperless global trading system, while helping small businesses to become part of global trade, the trade ministry said in a statement.
Separately, benchmark indices ended in the red on Friday on the back of profit taking seen in IT stocks as well as PSU stocks, said S. Ranganathan, Head of Research at LKP Securities.
The 6 per cent deficiency in monsoon was an important factor with several states witnessing deficits across districts. The Evergrande Bankruptcy in China though was brushed away since real-estate loans in India are by and large regulated well now, Ranganathan said.
Domestic equities had a weak start in line with its global peers. Nifty remained in the negative territory throughout the session and closed with a loss of 83 points (-0.4 per cent) at 19,282 levels, while the BSE Sensex dropped 202.36 points or 0.31 per cent to settle at 64,948 levels.
Among sectors, PSU bank, metals and FMCG ended in the green.
Global markets extended their losses as concerns over higher interest rates and slowing China’s economy weighed on investors.Even domestically, markets have been consolidating in the absence of any positive trigger and consistent selling by FIIs, said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.
Vinod Nair, Head of Research at Geojit Financial Services, said concerns regarding inflation and shifts in investor preferences towards safer assets dampened overall market sentiment for domestic equities.
Fears of a US Fed rate hike, coupled with a decline in global equities, exerted additional downward pressure, specifically on IT stocks. Higher US bond yields and default risk in China are poised to prompt FIIs to adopt a more prudent stance when considering investments in the emerging markets, Nair said.
The Reserve Bank of India (RBI) has said in its monthly bulletin for August 2023 that with industrial production and trade weakening, the global recovery is slowing after a robust first quarter performance, but the Indian economy is gathering momentum in the second quarter of 2023-24.
The chapter on the “State of economy” in the bulletin said that the uptick in inflation in its June reading mutated in July, with the unprecedented shock to tomato prices spilling over to prices of other vegetables, the bulletin noted further. At the same time core inflation witnessed a moderation, and headline inflation is expected to average well above 6 per cent in the second quarter of the current fiscal, the chapter said.
It went on to note that domestic drivers such as private consumption and fixed investment are offsetting the drag from the contraction in exports.
Another chapter in the RBI bulletin on “Exogenous Shocks and India’s Growth Performance Post COVID-19” said that a compositional shift in private consumption has been underway much before the pandemic as reflected in a sustained increase in the share of services over goods.
“Fixed investment in India responds positively to higher GDP growth, real non-food credit growth and economic policy certainty,” the chapter noted.
On the supply-side, the adverse impact of the energy price shock on manufacturing output has been dissipating.
The buoyancy in the services sector activity is expected to sustain going forward, the chapter noted.
Another chapter on “Agriculture’s Dependency on Monsoon Rainfall in India” said that while the impact of south west monsoon rainfall on agricultural production is found to be statistically significant, it has moderated over time, suggesting an increased resilience of agriculture to monsoon shocks.
Agencies
