India looks Latin America FTAs to support domestic EV plan
India is looking forward towards Latin America FTAs (Free trade agreement). It has proposed a major shift in its foreign trade policy, that will explore free trade agreements (FTAs) only with countries that can support its ‘Aatmanirbhar Bharat’ mission which will provide India with the necessary raw materials, critical components and equipment needed to support manufacturing activities.
Domestic EV plan
With that regard, the Department for Promotion of Industry and Internal Trade (DPIIT) of the Commerce Ministry has proposed entering into FTAs and mining agreements with resource-rich countries in Latin America and Africa.
The department of augmenting industrial growth in India in its internal presentation said that such focused FTA arrangements will help the country to boost electric vehicle penetration as countries such as Bolivia, Argentina, Chile, Congo, and South Africa are rich in mineral resources, particularly lithium and cobalt. These minerals go into making the batteries that are critical to any EV plan.
“This is a very good idea that should also be looked for other sectors where the country faces shortages of domestic support systems. However, such FTAs can work only when identified goods are secured and are cost-effective that gives necessary advantages to the domestic industry,” said a trade analyst.
In the next few years, India is looking to shift to a third of its mobility on to the electric mode. These trade agreements will surely help in boosting domestic manufacturing of batteries and give a push to the development of an EV ecosystem in India.
Till now India is close to trading agreements (including preferential agreements) either in effect or signed or under negotiation or proposed. In that most of the FTAs are with the Asian countries which are different according to their growth and development. In Latin America, India has an only trade agreement with Chile.
However, FTAs of India has only provided limited profits to the country that’s why the concerned people have been raised their concern by both the industry and within the government. They have reviewed the existing trade arrangements and negotiate changes that work to the advantage of the Indian industry.
What is Free trade agreement?
A free trade agreement is a preferential arrangement in which members reduce tariffs on trade among themselves while maintaining their own tariff rates for trade with non-members.
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