Commerce and Industry Minister Piyush Goyal recommended that the seven-member countries of the BIMSTEC bloc reassess the progress of their Free Trade Agreement negotiations, which have been advancing slowly.
He proposed that the members consider negotiating a preferential trade agreement as an alternative to a comprehensive free trade pact.
BIMSTEC, or the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, comprises five South Asian countries—Bangladesh, Bhutan, Nepal, India, and Sri Lanka—and two Southeast Asian nations, Myanmar and Thailand.
The bloc has been negotiating a proposed FTA since 2004, with over 20 rounds of discussions conducted to date. The most recent round took place in 2018.
"I would like to raise a few fundamental issues about where we stand and what are the possibilities of making this FTA a reality," Goyal said at CII's BIMSTEC Business Summit 2024 on Wednesday.
He said that so far 22 rounds of talks have been held for the agreement and this itself raises a question on whether "we need to pause and have a relook at the track where we are going".
The last round of negotiations took place some six years ago, which means something is holding back this FTA, he said.
The reasons for slow progress can be the non-trade barriers or trade barriers coming in the way of normal trade, he said, adding the possible impact of other regional FTAs on the BIMSTEC region could be the cause of the delay.
"It could be the trade practices or current trade relationships that could be a reason for this FTA not taking place," the minister said.
He also asked the business leaders of the seven countries to think whether they need this agreement. The minister further suggested the member nations to consider trade in local currencies to balance out trade imbalances.
He asked the CII to take the lead and discuss about the proposed pact and come out with their recommendations by next year's Summit. "Maybe, we can begin with a PTA (preferential trade agreement) if not a full-blown FTA... But let's examine the realistic possibility and move forward on a fast-track basis," he said.
Representatives from the member countries including Sri Lanka, Myanmar and Thailand talked about the early conclusion of FTA negotiations as it would help boost trade and investments in the region.
Overall, India's total trade with BIMSTEC countries amounted to $44.32 billion in 2023-24.
(With inputs from PTI)
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