The Hindu Business Line
India to examine feasibility of free trade pacts as Mexico warms up to industry
Dairy, pharma, telecom sectors see big opportunity
India plans to examine the feasibility of a free trade agreement (FTA) with Mexico in line with its objective of diversifying trade beyond the European Union and the US, a government official has said.
The North American country holds opportunities for India to expand trade and a visiting trade delegation has already been promised increased opportunities for sectors, including dairy, pharmaceuticals and telecom outside a free trade pact, he added.
“The Commerce Secretary recently led a trade delegation to Mexico, including representatives from industries such as dairy, telecom, tyre manufacturers, pharmaceuticals and IT. There were a lot of productive meetings with both the private industry and government agencies and we do see a lot of potential to expand,” the official said.
India had looked at a possible free trade pact with Mexico in 2012, but it had not seemed a good idea because of limited trade at that time.
“Since then (2012), bilateral trade has grown three-fold to $6 billion and a lot of product diversification has taken place. It makes sense to carry out a feasibility study again and see if an FTA would help in mutual expansion of trade in goods and services,” the official added.
While India’s total exports to Americas declined more than 10 per cent in 2015-16 to $52.882 billion and exports to the US declined 4.57 per cent to $45.3 billion, exports to Mexico, at $2.86 billion, remained unchanged.
“Our exports to Mexico are just a little more than 1 per cent of our total shipments, but that is because our industry has not been focusing on it due to the distance between the two countries. Now that both sides are willing to engage, we see immense potential,” the official said.
The dairy industry, for instance, hopes to gain access to the country soon as an outcome of a fruitful meeting with officials from Mexico’s Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food.
“The Mexicans have not been importing casein and caseinate products from India as they fear infection of Foot & Mouth Disease. The Indian industry explained how such items produced out of milk are treated at high temperatures at which FMD virus cannot survive and underlined that several developed countries, including the US, import such items from India,” he said.
Mexico has said that it will ex- amine the Indian dossier on the issue and will respond in two months.
Similarly, in the area of pharmaceuticals, India’s proposal of getting into an equivalence agreement, which will help in registration of new drugs from the country, was received positively.
Mexico has similar agreements with the US Food and Drugs Authority and Canada Health.
“We were asked to submit our proposal officially to their drugs regulator,” the official said.
Indian telecom companies, too, are positive about Mexico with the country going in for a massive expansion of its optic fibre network, broad-band coverage and setting up of solar power based mobile towers.
Companies such as Tejas Network and Vihan Network discussed possibilities with their Mexican counterparts and officials.