Emphasising on the need to increase focus on regional integration, Commerce Secretary Rajeev Kher today said the mega free trade deal - RCEP - would help India in boosting commerce and manufacturing.
"My message here is that regional integration is extremely important and India must work towards it. It is India's time to take advantage of this... if you don't do that, we will lose the regional chain; and Regional Comprehensive Economic Partnership (RCEP) is a great opportunity for us," Kher said here at a CII function.
India is part of the group - RCEP - which is negotiating a mega free trade agreement (FTA). The 16-member RCEP comprises 10 Asean members and its six FTA partners namely India, China, Japan, Korea, Australia and New Zealand. The 16 economies account for over a quarter of the world economy.
RCEP negotiations began in Phnom Penh, Cambodia, in November 2012.
He said RCEP is crucial for the Indian industry at a time when developed economies are getting engaged in negotiating mega free trade deals - Trade and Investment Partnership (TTIP) and Transatlantic Trade and Partnership (TTP).
"Preferential trading systems in the form of mega trade arrangements have been evolved in the last few years...It is a clear sign of new architecture of global trading which is emerging and RCEP is clearly complimenting to this new architecture," Kher said.
He said that India's participation in sub-regional and regional value chains are far less than the other RCEP members.
Allaying concerns of the industry about the free trade pacts and said that it would be a "generic statement" that FTAs have not served its purpose.
However, he added that "if you were to dissect the whole aspect of FTAs, surely there are good lessons to learn, there bad lessons to learn".
India has so far entered into FTAs with Japan, Singapore, South Korea, Malaysia, Asean and South Asia.
Speaking on the occasion, Secretary in the Department of industrial Policy and Promotion (DIPP) Amitabh Kant said India must put special focus on manufacturing sector in order to generate jobs and boost economic growth in the country.
Inviting Japanese companies to invest in India, Kant said the firms should manufacture here and use India as a base to export also.
Kant said that regional trade agreements are inevitable in today's world as they help in expanding the world trade.
"...if you look at global trade, it is essentially regional in nature and therefore regional manufacturing and global supply chain is an essential imperative that will take place and how India benefits from it is going to be very critical to this."
"Because there is no way manufacturing will take place if we are not part of the global supply chain," he said, adding "we must have a win win situation for FTAs".
He also said that with increasing wages and inflation in China, India is the best market after Indonesia to set up manufacturing units.
Citing example of Korean companies, the DIPP Secretary asked Japanese firms to invest here and set up manufacturing bases.
"Japanese companies must relocate and manufacture in India...Japanese companies' future is not in Japan. Your (Japan's) population is ageing and the demand will not grow. The demand is in India," he said.
He was speaking at the symposium On 'Benefiting from Regional Trade Agreements - India's Manufacturing Growth Holds Key'. Business representatives from Japan were present in the function.
Kant said that Japanese companies can join hands with domestic firms and also use India as a base for exports.
Further he said that the Japanese firm which runs UNIQLO chain of casual clothing is tying up with Indian companies.
In June, Fast Retailing group Chairman Tadashi Yanai has met Prime Minister Narendra Modi and expressed intention to source garments from India.