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'Future of Jobs' Report by WEF

The World Economic Forum (WEF) in its report 'Future of Jobs' found that machines are increasingly replacing jobs done by people. It projected that...

18 Sep 2018 Global Groupings
India’s Bid for NSG Membership

...

11 Sep 2018 Global Groupings
India and the Shanghai Cooperation Organisation

The editorial analyses SCO's significance for India. Shanghai Cooperation Organisation (SCO) The SCO was formed in 2001, with the intent of...

03 Sep 2018 Global Groupings
Pieces of the Asian Dream

The article appears in The Hindu, of 29th August 2018. It engages with India’s relation with the South-East Asian countries and analyses its...

29 Aug 2018 Global Groupings
A Note on Free Trade Agreements and Their Costs

What are FTAs (Free Trade Agreements)? FTAs are arrangements between two or more countries or trading blocs that primarily agree to reduce or...

29 Jun 2018 Global Groupings

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		'title' => ''Future of Jobs' Report by WEF',
		'description' => '<p>The World Economic Forum (WEF) in its report 'Future of Jobs' found that machines are increasingly replacing jobs done by people. It projected that more than half of all workplace tasks will be carried out by machines by 2025.</p>
<ul style="list-style-type: square;">
<li>It predicts the loss of some 75 million jobs worldwide by 2022, but also says 133 million new jobs will be created.</li>
<li>According to WEF, despite bringing widespread disruption, the advent of the Fourth Industrial Revolution could actually have a positive impact on human employment.</li>
</ul>
<h3>Key Findings</h3>
<ul style="list-style-type: square;">
<li>Four specific <strong>technological advances</strong>: universal high-speed mobile internet; artificial intelligence; widespread adoption of big data analytics; and cloud technology&mdash;are set to dominate the 2018&ndash;2022 period as drivers positively affecting business growth.</li>
<li>By 2022, large proportions of companies are likely or very likely to have expanded their adoption of technologies such as the internet of things, big data analytics and app and web enabled markets, and to make extensive use of cloud computing.</li>
<li>Companies across all sectors are most likely to <strong>adopt the use of stationary robots</strong>, in contrast to humanoid, aerial or underwater robots, however leaders in the Oil &amp; Gas industry report the same level of demand for stationary and aerial and underwater robots, while employers in the Financial Services industry are most likely to signal the planned adoption of humanoid robots in the period up to 2022.</li>
<li>When determining job location decisions, companies overwhelmingly prioritize the <strong>availability of skilled local talent</strong> as their foremost consideration.&nbsp;A range of additional relevant factors such as the flexibility of local labour laws, industry agglomeration effects or proximity of raw materials were considered of lower importance.</li>
<li>In 2018, humans performed an average of 71% of total task hours across the 12 industries spanning manufacturing, services and high tech. By 2025, that will drop to just 48%. Machines will perform the remaining 52% task.</li>
<li>Among the range of established roles that are set to experience increasing demand in the period up to 2022 are Data Analysts and Scientists, Software and Applications Developers, and Ecommerce and Social Media Specialists, roles that are significantly based on and enhanced by the use of technology.</li>
<li><strong>Roles that leverage distinctively human skills</strong>, such as Customer Service Workers, Sales and Marketing Professionals, Training and Development, People and Culture, and Organizational Development Specialists as well as Innovation Managers, are expected to grow.</li>
<li>There is extensive evidence of <strong>accelerating demand for a variety of wholly new specialist roles</strong> related to understanding and leveraging the latest emerging technologies: <strong>AI and Machine Learning Specialists, Big Data Specialists</strong>, Process Automation Experts, Information Security Analysts, User Experience and Human-Machine Interaction Designers, Robotics Engineers, and Blockchain Specialists.</li>
<li>By 2022, no less than 54% of all employees will require significant re- and upskilling. Proficiency in new technologies is only one part of the 2022 skills equation, however, as&nbsp; human skills such as creativity, originality and initiative, critical thinking, persuasion and negotiation will likewise retain or increase their value.</li>
<li><strong>Emotional intelligence, leadership and social influence</strong> as well as service orientation also see an exceptionally large increase in demand relative to their current prominence.</li>
</ul>
<h3>Suggestions</h3>
<ul style="list-style-type: square;">
<li>The need for a comprehensive <strong>&lsquo;augmentation strategy</strong>&rsquo;, an approach where businesses look to utilize the automation of some job tasks to complement and enhance their human workforces' comparative strengths and ultimately to enable and empower employees to extend to their full potential.</li>
<li>Rather than narrowly focusing on automation-based labour cost savings, an augmentation strategy takes into account the broader horizon of value-creating activities that can be accomplished by human workers, often in complement to technology, when they are freed of the need to perform routinized, repetitive tasks and better able to use their distinctively human talents.</li>
<li>To unlock this positive vision, workers will need to have the appropriate skills enabling them to thrive in the workplace of the future and the ability to continue to retrain throughout their lives.</li>
<li>Crafting a sound lifelong learning system, <strong>investing in human capital</strong> and collaborating with other stakeholders on workforce strategy should thus be key business imperatives, critical to companies&rsquo; medium to long-term growth, as well as an important contribution to society and social stability.</li>
<li>A mindset of <strong>agile learning</strong> will also be needed on the part of workers as they shift from the routines and limits of today&rsquo;s jobs to new, previously unimagined futures.</li>
<li>Finally, <strong>policy-makers, regulators and educators</strong> will need to play a fundamental role in the development of new agile learners in future workforces by bringing improvements in education and training systems, as well as updating labour policy to match the realities of the Fourth Industrial Revolution.</li>
</ul>
<h3>In Context of India</h3>
<ul style="list-style-type: square;">
<li>An overreliance on <strong>automation is expected to shrink job creation&nbsp;</strong>in India. Automation and robotics in industrial manufacturing are better suited for countries with low productive populations. But it does not suit countries like India, where 12&ndash;13 million people enter the job market every year.</li>
<li>There is a <strong>natural fear of job loss</strong> resulting from automation and robotics in India. Repetitive processes are being increasingly automated. Banks in India are already using chatbots and even humanoid robots.&nbsp; For eg. HDFC Bank has the <strong>Ira robot</strong>, which helps customers choose the right service and financial products.</li>
<li>However, loss of jobs can be countered by reskilling, and by creating new opportunities.</li>
<li>Fourth Industrial Revolution&nbsp; also brings <strong>tremendous opportunities</strong> to leapfrog many stages of development, hastening its journey towards becoming a developed economy. In many ways, the Fourth Industrial Revolution can be seen as a leveller. The technologies being used in India will be the same as those in use in the developed world. Robots, AI, IoT are all technologies transforming industry in the West and are ready to do the same in India.</li>
<li>New industry sectors are being created. These have potential to create work for millions. There is already industry associations for producing and promoting the use of drones in India.&nbsp;</li>
<li>India needs a collaborative effort. It will have to create a long term ecosystem that trains and educates professionals. India could collaborate with the US, Germany, and the EU. The central government can consider a joint platform between ministries, state governments and industry bodies to create a mission for making the most of the Fourth Industrial Revolution technologies.</li>
</ul>
<div class="border-bg">
<h3>Fourth Industrial Revolution</h3>
<ul style="list-style-type: square;">
<li>The <strong>first Industrial Revolution</strong> began in Britain in the last quarter of the 18th century with the <strong>mechanisation of the textile industry, harnessing of steam power</strong>, and birth of the modern factory.</li>
<li>The <strong>second revolution</strong> began roughly a century after the first and peaked at the beginning of the 20th century, exemplified in <strong>Henry Ford&rsquo;s</strong> creation of the moving <strong>assembly line that resulted in mass production</strong>. Factories could produce countless numbers of identical products quickly and cheaply.</li>
<li>The <strong>third industrial revolution</strong>, beginning in 1970s, was digital and <strong>applied electronics and information technology</strong> to processes of production.</li>
<li>The <strong>fourth industrial revolution</strong> is conceptualised as an <strong>upgrade on the third revolution</strong> and is marked by a fusion of technologies extending the physical, digital and biological worlds. The speed of change is utterly unprecedented as it is disrupting almost every industry in every country, and it heralds the transformation of entire systems of production, management, and governance.</li>
<li>WEF describes the new revolution as the advent of <strong>cyber-physical systems</strong> which, while being reliant on the technologies and infrastructure of the third industrial revolution, represent entirely new ways in which technology becomes embedded within societies and even our human bodies. Examples, include genome editing, new forms of machine intelligence, and breakthrough approaches to governance that rely on cryptographic methods such as blockchain.</li>
<li>It is <strong>marked by emerging technology breakthroughs</strong> in a number of fields, including<strong> robotics, artificial intelligence, nanotechnology, quantum computing,</strong> biotechnology, the Internet of Things, the Industrial Internet of Things (IIoT), fifth-generation wireless technologies (5G), additive manufacturing/3D printing and fully autonomous vehicles.</li>
</ul>
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		'article_id' => (int) 581,
		'category_id' => (int) 22,
		'title' => 'India and the Shanghai Cooperation Organisation',
		'description' => '<p><em>The editorial analyses SCO's significance for India.</em></p>
<h3>Shanghai Cooperation Organisation (SCO)</h3>
<p>The SCO was formed in 2001, with the intent of reducing the tension at the Eurasian borders strained by the Sino-Soviet rivalry of the Cold War. However, the organization has become more inclusive in its agendas, moving forth from its core security orientation, seeking greater regional prosperity for the collective. Culture has become an important element of the SCO, attuned to the group&rsquo;s search for an inclusive Eurasian identity.</p>
<ul style="list-style-type: square;">
<li>As a regional grouping, SCO has provided India, China <g class="gr_ gr_107 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep" id="107" data-gr-id="107">and</g> Russia with an opportunity to reset regional ties.</li>
<li>The recent, SCO summit was held in June 2018 in Qingdao, China. India (with Pakistan) was admitted as its full member in the Astana summit, 2017.</li>
<li>The SCO summit gave India fresh leads to engage with Central Asia. Landlocked Uzbekistan will now funnel goods through the Iranian port of Chabahar &mdash; a joint undertaking of Iran, India, and Afghanistan.</li>
<li>Other than this India is re-exploring a transit corridor to Central Asia through Pakistan under the SCO&rsquo;s multilateral connectivity initiative. If the Pakistan-Central Asia two-way route works, it can soften the ground for improved ties between the two countries.</li>
</ul>
<h3>Members, Goals of the Pan-Eurasian Grouping</h3>
<ul style="list-style-type: square;">
<li>SCO is a permanent intergovernmental international organization formed in 2001. It was preceded by the Shanghai Five mechanism.</li>
<li>SCO was launched by China, Russia, Tajikistan, Uzbekistan, Kyrgyzstan, and Kazakhstan, reflecting a growing awareness among these countries to come to terms with the unilateralism of the U.S.-led post-Cold War world order.</li>
<li>The SCO comprises eight member states namely India, Kazakhstan, China, the Kyrgyz Republic, Pakistan, the Russian Federation, Tajikistan, and Uzbekistan.</li>
<li>There are four observer <g class="gr_ gr_176 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-del replaceWithoutSep" id="176" data-gr-id="176">states:</g> Afghanistan, Belarus, Iran, Mongolia and six dialogue partners including Nepal and Sri Lanka.</li>
<li>Its <strong>main goals</strong> are: strengthening mutual trust and neighbourliness among the member states; promoting their effective cooperation in politics, trade, the economy, research, technology and culture, education, energy and other areas; making joint efforts to maintain and ensure peace, security and stability in the region; and moving towards the establishment of a democratic, fair and rational new international political and economic order.</li>
</ul>
<h3>What is India&rsquo;s Stake and Role in the SCO?</h3>
<ul style="list-style-type: square;">
<li>India&rsquo;s entry into SCO provides it&nbsp;with the opportunities in the geoeconomic and the geostrategic sphere in the Central Asian Region (CAR) which supplies around 10 percent of oil and energy to the world. Once energy-rich Iran is in the group, the stakes will be higher.</li>
<li>India&rsquo;s pending energy projects like the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline, IPI (Iran-Pakistan-India) pipeline can get a much-needed push through the SCO.</li>
<li>India could gain from SCO&rsquo;s Regional Anti-Terrorist Structure (RATS) analyzing key intelligence inputs on the movements of terror outfits, drug-trafficking, cybersecurity threats, and public information.</li>
<li>Under its framework, SCO can provide a rare opportunity for Pakistan and India to share several multilateral tables &ndash; antiterrorism structure, military exercises etc.&nbsp;</li>
<li>The SCO provides a platform for India to improve its bilateral relations with the Central Asian countries. It could be also useful for checking the rising influence of China in the Eurasian region.</li>
<li>The grouping is planning to initiate negotiations on the SCO FTA (free trade agreement) by 2020.</li>
</ul>
<h3>Conclusion: SCO Matters</h3>
<ul style="list-style-type: square;">
<li>From the Indian foreign policy point of view, SCO opens up Central Asia for India while opening up vistas for regional cooperation in the region.</li>
<li>India needs more engagement in the region in the light of the growing Chinese influence and the need for energy security and regional stability.</li>
</ul>
<div class="border-bg">
<p><strong>Fighting Terrorism: SCO-RATS and India</strong></p>
<ul style="list-style-type: square;">
<li>SCO-RATS is a permanent body of the SCO and is intended to facilitate coordination and interaction between the SCO member states in the fight against terrorism, extremism <g class="gr_ gr_94 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep" id="94" data-gr-id="94">and</g> separatism.</li>
<li>The main functions of SCO-RATS are coordination and information sharing. As a member, India has actively participated in the activities of SCO-RATS.</li>
<li>India&rsquo;s permanent membership would enable it to generate greater understanding among members for its perspective.</li>
</ul>
<p><strong>Plurilateralism: a term for India&rsquo;s Current Foreign Policy</strong></p>
<ul style="list-style-type: square;">
<li>Countries with common interests have traditionally come together in subgroups to formulate, influence and negotiate policies both within and outside multilateral frameworks that characterize international decision-making processes.</li>
<li>Plurilateralism is not a new phenomenon but has been used by powerful blocs in and outside the multilateral framework.</li>
<li>Given the current complexities of multilateral negotiations, a shared interest among a limited number of governments brings these together for interconnection. This process of forming blocs is conceptualized as <g class="gr_ gr_81 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling ins-del multiReplace" id="81" data-gr-id="81">plurilateralism</g>.
<ul style="list-style-type: circle;">
<li>Examples of Indian <g class="gr_ gr_80 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling" id="80" data-gr-id="80">plurilateralism</g> (multiple mini-multilateral groupings) include BRICS, IBSA, BIMSTEC, G20, and SCO.</li>
</ul>
</li>
</ul>
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		'article_id' => (int) 450,
		'category_id' => (int) 22,
		'title' => 'Pieces of the Asian Dream',
		'description' => '<p><em>The article appears in The Hindu, of 29th August 2018. It engages with India&rsquo;s relation with the South-East Asian countries and analyses its implications on the geopolitics of the region. It gives a perspective on how Indian ambitions are being tested against Chinese assertiveness and resourcefulness.</em></p>
<p>The ongoing geopolitical rivalry of U.S and China has changed the relationship between the countries of South-East Asia. India is slowly emerging as a significant strategic space in the new power struggle being witnessed in the Indo-Pacific region.</p>
<h3>Influence of Indo-China relations on the South-East Asian region</h3>
<p>Both India and China have been seen struggling for the center-stage in the Indo-Pacific region and the relation between the two countries with each other influences sea lanes and chokepoints.</p>
<p>India maintains its relations with the Association of Southeast Asian Nations (ASEAN) countries through comprehensive diplomatic, bilateral and military dialogues. China, on the other hand, provides these countries with much-needed investment support for the infrastructure development. The immense influence of China&rsquo;s investment policy is reflected in ASEAN&rsquo;s decision as a regional block to dismiss the international ruling against the South China Sea activities of China and instead agreed to cooperate with it on a &lsquo;Code of Conduct&rsquo;.</p>
<h3>China&rsquo;s investment in the region</h3>
<p>China is one of the largest providers of foreign aid in the region and contributes to the investment in dams, oilfields, highways, textile operation and mines. It provided rifles and guns to the Philippines police after the same demand was struck down by the U.S.</p>
<p>ASEAN&rsquo;s trade with China surpasses that with India and Chinese Foreign Direct Investment (FDI) is nine times higher in these countries than India&rsquo;s. China&rsquo;s growing military presence also gives it an upper hand as a decision maker in the region and offers a threat to India&rsquo;s diplomatic hobnobbing in the region. Apart from this, declining relations with Nepal over the 2015 fuel blockade and failed strategic interventions in Sri Lanka add to the woes of the country. Both the countries have been observed to shift towards China over the significant infrastructural investment flows.</p>
<p>However, the assertiveness and intervention in the internal matters of the countries that come with the Chinese investment have driven few countries like Indonesia and Singapore to find refuge in their relationship with India. <br /><a href="/news-analysis-editorials/news-editorials/06-08-2018" target="_blank" rel="noopener">Read more...The Many Problems with China's Belt and Road Initiative</a></p>
<h3>India&rsquo;s strategic bargain for China</h3>
<p>India and ASEAN share a unique cultural history and a sizeable Indian diaspora resides and contributes to the economies of countries like Singapore and Malaysia. The global soft power that India enjoys through its art, literature, music, dance, and cinema contributes to its image as a friendly nation which furthers its long-term engagement with the countries in the East Asian region.</p>
<p>Increased engagement with Japan, &lsquo;2+2&rsquo; dialogue for better maritime partnership with Australia (India is going to have a separate 2+2 dialogue with the US), along with its dominant soft power can be utilized by India to counter China&rsquo;s influence in the region. However, striking a balanced strategic relation with China can open up new possibilities for India to gain influence in the Indo-Pacific region especially among groupings like Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and Bangladesh, Bhutan, India, and Nepal (BBIN).</p>
<h3>Way Forward</h3>
<ul style="list-style-type: square;">
<li>China&rsquo;s agreement with India on data sharing over <strong>cross-border flow of waters from the Brahmaputra during a flood season</strong> was renewed at the SCO summit. This can be an opening to a more meaningful engagement between the two Asian giants.</li>
<li>Also, a protocol has been signed by the two countries for the <strong>exports of all varieties of rice from India to China</strong> which can partly resolve India&rsquo;s adverse balance of payments against China.</li>
<li>A <strong>potential trade target of $100 billion by 2020</strong> has been suggested by China. This can provide a positive direction <g class="gr_ gr_49 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar multiReplace" id="49" data-gr-id="49">to</g> the relationship between the two countries.</li>
<li>Following the above-mentioned steps, an improved Indo-China relation can give way to <strong>a more defined geopolitical role for India</strong> in the Indo-Pacific region.</li>
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		'article_id' => (int) 25,
		'category_id' => (int) 17,
		'title' => 'A Note on Free Trade Agreements and Their Costs',
		'description' => '<h3>What are FTAs (Free Trade Agreements)?</h3>
<p>FTAs are arrangements between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tariff and non tariff barriers on substantial trade between them. FTAs, normally cover trade in goods (such as agricultural or industrial products) or trade in services (such as banking, construction, trading etc.). FTAs can also cover other areas such as intellectual property rights (IPRs), investment, government procurement and competition policy etc.</p>
<h3>Why are almost all the countries signing Free Trade Agreements?</h3>
<ul style="list-style-type: square;">
<li>By eliminating tariffs and some non-tariff barriers, FTA partners get easier market access into one another's countries.</li>
<li>Exporters prefer FTAs to multilateral trade liberalization because they get preferential treatment over non-FTA member country competitors.</li>
<li>Possibility of increased foreign investment from outside the FTA.</li>
</ul>
<p><strong><em>For example,</em></strong> Consider 2 countries A and B having an FTA. Country A has high tariff and large domestic market. The firms based in country C may decide to invest in country A to cater to A's domestic market. However, once A and B sign an FTA and B offers better business environment, C may decide to locate its plant in B to supply its products to A.</p>
<h3>India&rsquo;s trade theory and patterns</h3>
<p>The export performance is mainly measured along the following lines:</p>
<ul style="list-style-type: square;">
<li><strong>Diversification across destinations, products and services</strong></li>
<ul style="list-style-type: circle;">
<li>Overall trade (exports plus imports) ~ 40% of GDP.</li>
<li>Its trade deficit has grown from USD 6bn in FY01 to USD 109bn in FY17.</li>
<li>Exports have diversified since 1990s, both geographically and product wise.</li>
<li>Export to developed countries has declined and that to emerging economies has increased.</li>
</ul>
<li><strong>Composition of export basket</strong></li>
<ul style="list-style-type: circle;">
<li>More high-value products like <strong>manufactured goods and petroleum products</strong> (together ~85% of total exports in FY17) being exported</li>
<li>Foreign value addition in the exports has also more than doubled across all the industries.</li>
</ul>
<li><strong>India&rsquo;s export potential</strong></li>
<ul style="list-style-type: circle;">
<li>According to International Trade Centre (ITC)</li>
<li>India&rsquo;s untapped export potential = USD 201.4bn</li>
<li>India&rsquo;s untapped import potential = USD 181.8bn</li>
<li>Markets with greatest potential for INDIA, USA, China and UAE</li>
</ul>
</ul>
<h3>Drivers of India&rsquo;s export</h3>
<ul style="list-style-type: square;">
<li>India now exports more income sensitive items like engineering goods, petroleum, gems and jewelry and chemical products.</li>
<li>Indian exports are sensitive to:</li>
<ul style="list-style-type: circle;">
<li>Price changes</li>
<li>Global demands</li>
<li>Supply side bottlenecks like energy shortages</li>
<li>External demands</li>
<li>Higher logistic costs</li>
</ul>
<li>Indian export is more sensitive to changes in external demands than to price changes.</li>
<li>India ranked 40, while China ranked 27 in <strong>Global Competitiveness Index</strong> 2017-18.</li>
<li>India&rsquo;s CIP (Competitiveness of Industrial Production) score improved from 0.04 in 2000 to 0.07 in 2010, and yet the improvement rate is <strong> far behind that of China.</strong></li>
</ul>
<h3>India&rsquo;s experience with Free Trade Agreements</h3>
<ul style="list-style-type: square;">
<li>Regional Trade Agreements today go beyond tariff cuts in trade in goods and incorporate various other components like liberalization in services, investment etc.</li>
<li>The first RTA of which India became a member was the <strong>Bangkok Agreement in 1975</strong>. In 2005, this reincarnated as <strong>Asia Pacific Trade Agreement (APTA)</strong>.</li>
<li>India&rsquo;s first bilateral FTA with Sri Lanka (ISFTA) came into effect in March 2000.</li>
<li>India&rsquo;s first bilateral FTA with Sri Lanka (ISFTA) came into effect in March 2000.</li>
<ul style="list-style-type: circle;">
<li>India's exports to FTA countries has not outperformed overall export growth or exports to rest of the world.</li>
<li>FTAs have led to increased imports and exports, although the former has been greater.</li>
<li>India&rsquo;s trade deficit with ASEAN, Korea and Japan has widened post-FTAs.</li>
<li>According to Economic Survey 2016-17, FTAs have had a bigger impact on metals on the importing side and textiles on the exporting side.</li>
<li>Utilisation rate of FTAs by exporters in India is very low (between 5 and 25%).</li>
</ul>
<li>Diversification of India&rsquo;s export basket is more responsible for India&rsquo;s export surge than RTAs.</li>
</ul>
<h3>Assessment of India&rsquo;s FTA with ASEAN, Japan, Korea, Sri Lanka</h3>
<ul style="list-style-type: square;">
<li>Bilateral trade increased post signing of all the above FTAs</li>
<li><strong>Imports from these FTA partners into India increased more than India&rsquo;s exports</strong> to partner countries post signing of FTAs</li>
<li>As imports from Korea, Japan and ASEAN have shot up after the respective agreements came into force, <strong>India&rsquo;s trade deficit with these countries has increased</strong> since then. Only exports to Sri Lanka have increased much more than imports into India from Sri Lanka.</li>
<li><strong>Overall trade deficit with ASEAN, Korea and Japan doubled</strong> from FY11 to FY17.</li>
<li><strong>Quality of trade has also deteriorated</strong> under India ASEAN FTA.</li>
<li>The analysis shows that <strong>trade balance has worsened</strong> (deficit increased or surplus reduced) for 13 out of 21 sectors. Sectors where trade deficit has worsened account for approximately 75% of India&rsquo;s exports to ASEAN.</li>
</ul>
<h3>India and China - Foreign trade Agreements</h3>
<p>China is India&rsquo;s biggest trading partner accounting for almost <strong>10% of India&rsquo;s overall trade</strong>.The Sino-Indian trade scenario can be summarized as:</p>
<ul style="list-style-type: square;">
<li>India&rsquo;s overall trade deficit with China has risen thirteen fold in the past decade. In fact, China now accounts for about <strong>50% of India&rsquo;s trade deficit</strong>.</li>
<li>India&rsquo;s exports to China have grown at an average of <strong>13%</strong> since FY04 while Chinese imports into India have increased at <strong>26%</strong> y-o-y</li>
<li>India tends to <strong>export primary materials</strong> such as ores, minerals and cotton, whereas <strong>Chinese exports to India</strong> are mostly a wide variety of sophisticated products <strong>higher up in the value chain</strong>.</li>
<li>China&rsquo;s export basket is better diversified than that of India&rsquo;s.</li>
<li>Nearly one-sixth of <strong>anti-dumping cases</strong> on China are from India.</li>
<li>Except Thailand and Malaysia, all other ASEAN countries having FTA with China are running in a trade deficit.</li>
</ul>
<h3>India and RECP</h3>
<table border="1" style="border-collapse: collapse; width: 100%;">
<tbody>
<tr style="height: 58px;">
<td style="width: 25.5717%; height: 58px;"><strong>What is RCEP</strong></td>
<td style="width: 74.3243%; height: 58px;">Regional comprehensive Partnership Agreement (RCEP) is a proposed free trade agreement (FTA) between 10 ASEAN countries and their six FTA partners, namely Australia, China, India, Japan, Korea and New Zealand.</td>
</tr>
<tr style="height: 10px;">
<td width="319" style="width: 25.5717%; height: 10px;">
<p><strong>Why it worth of so much attention</strong></p>
</td>
<td style="width: 74.3243%; height: 10px;">
<p>It accounts for:</p>
<ul style="list-style-type: square;">
<li>25% global GDP</li>
<li>30% global trade</li>
<li>26% FDI flows</li>
<li>45% of the total population</li>
</ul>
</td>
</tr>
<tr style="height: 98px;">
<td width="319" style="width: 25.5717%; height: 98px;">
<p><strong>The significance for India</strong></p>
</td>
<td width="319" style="width: 74.3243%; height: 98px;">
<p>For India RCEP accounts for:</p>
<ul style="list-style-type: square;">
<li>27% total trade</li>
<li>15% exports</li>
<li>35% imports</li>
<li>$83 billion of trade deficit (in 2017) out of which China alone accounts for 60%</li>
</ul>
</td>
</tr>
<tr style="height: 95px;">
<td width="319" style="width: 25.5717%; height: 95px;">
<p><strong>Challenges it poses</strong></p>
</td>
<td width="319" style="width: 74.3243%; height: 95px;">
<ul style="list-style-type: square;">
<li>India&rsquo;s trade deficit with the bloc has risen from $9 billion in FY05 to $83 billion in FY17</li>
<li>India&rsquo;s trade deficit with the bloc has risen from $9 billion in FY05 to $83 billion in FY17</li>
<li>India is not able to negotiate on the terms</li>
<li>Tariff cuts under RCEP overlap with existing FTAs</li>
<li>China seems to benefit the most out of the RCEP, gaining in exports to other countries</li>
<li>Existing FTAs are lying unutilized</li>
</ul>
</td>
</tr>
</tbody>
</table>
<p></p>
<h3>Some policy recommendations</h3>
<ol>
<li>Review and assess its existing FTAs in terms of benefits to various stakeholders and changing trade patterns, before signing new ones.</li>
<li>Negotiate bilateral FTAs with countries where trade complementarities and margin of preference is high.</li>
<li>Reduce compliance cost and administrative delays is extremely critical to increase utilisation rate of FTAs.</li>
<li>Proper safety and quality standards should be set to avoid dumping of lower quality hazardous goods into the Indian market. Circumvention of rules of origin should be strictly dealt with by the authorities.</li>
<li>RCEP negotiations especially with China need to be properly pondered upon and planned.</li>
</ol>',
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