Newsclick discusses with Deepak Nayyar, eminent Economist, India's External Credit Balance Crisis. Nayyar says the situation is serious and we have the seeds of a macro-economic crisis in the external sector. The Current Account Deficit is at a level which is unsustainable. Financing it in the short term is no solution. He says unless there is a beginning to address the fundamentals in the external sector, the situation cannot be remedied. Talking about the export sector, Nayyar says, “ We have killed auto parts exports by entering into Free Trade Agreement with ASEAN and there are serious concerns on the FTA with the European Union.”

‘The challenge is not how the state can regulate the market, but how society can regulate both the state and the market.’

The difference between the FTAs and the earlier trade talks under the WTO regime is that while the multilateral talks under WTO are relatively open with texts in the public domain, the FTA talks are shrouded in secrecy.

The Free Trade Agreements that India is negotiating has serious implications for Indian agriculture, food and access to medicines and industry. If proper protection is not taken, FTAs through exceptions, it will act as the floor in all trade negotiations, effectively subverting our position in WTO.