Sanjaya Baru,one former media adviser to Manmohan Singh, has defined the plan of the western powers and China on TFA in clear terms, when he said, "In the current stand-off on India's stance on its food security policy, Western powers are pretending as if they are the upholders of fair play and India the spoiler. The fact is that major trading powers have never shied away from being spoilers in multilateral trade talks whenever it has suited their national interest. It should be recalled that the US and EU have readily deployed non-economic weapons to threaten their trade partners whenever their economic interests have been threatened. When Japan emerged as a competitive global exporter, building a huge trade surplus vis-à-vis the transatlantic economies, the US deployed domestic laws, Special and Super 301, to get Japan to adopt 'voluntary export restraints'. The EU "single market" was created in the early 1990s as a conscious response to Japan's rise."
Narendra Modi, a prime minister of a developing nation and international leader with mere two month's experience, has shown the world where resurgent India under his leadership stands. The task ahead is much difficult in the present circumstances where safeguarding India's national and economic interest is of prime interest,but even a hard persuasion and pressure by the US Secretary Kerry could not change his hard stance on TFA.
India has done the right act by scuttling the trade facilitation agreement by pressing the food security as the point of moral and justified argument against it, and reminded to the western lobbyist in a hard way that from now on it will be India and Indian people's interest first.
India's persistent trade deficit is a huge problem as with our huge need of economic and defence imports, which is much higher than exports and any move to facilitate trade conditions further will be only beneficial to the major manufacturing and exporting nations. An easy and liberal TFA rules and conditions will worsen out trade deficit and damage the rupee further.
It is worth reminding that only in last year India imported $450 billion worth of merchandise while the export was only $312 billion and it created huge trade deficit of $ 138 billion . Though the deficit figure was down from the year before amount of $190 billion, but it was only at the cost of curtailing of import of essential and defence necessities and also due to the clampdown on gold imports by Chidambaram.
With China, one of biggest competing exporter in the world affecting Indian economy, the adverse trade balance has been worse in the bilateral trade with India, having a trade deficit of $31.42 billion.
INDIA HONEST argues that though world economists may have been claiming that the TFA alone will add $1 trillion to the world economy and 21 million new jobs. The fact is that no one can really guarantee this but one fact is clearly visible that it will damage the interest of developing and underdeveloped nations..
Moreover the promised 21 million jobs may well get created mostly in the major exporting nations like China but it may not be of much help to India. As India's manufacturing has been downgraded much in last one decade with the rising inflation and falling rupee.
It is even feared the trend will rise more if TFA is allowed in this form, where most Indian companies may reduce domestic manufacturing, preferring instead buying products from China and or even resource their own products from China. The recent Euro crisis has not resolved to a greater extent and TFA may be a bigger plan to rechristen the falling EU and US economy.