PricewaterhouseCoopers (PwC) has highlighted the importance of businesses being aware of regulatory barriers in climate change, labour protection, gender inclusivity, and e-commerce for modern free trade agreements (FTAs). These issues were not included in India’s earlier FTAs, but the country has demonstrated a willingness to negotiate on these matters in recent FTAs with the UAE, Australia, and Mauritius, and ongoing talks with the UK, EU, Canada, and Israel. As such, businesses should be mindful of the regulatory barriers they may face in these areas when entering into modern FTAs.
Anticipating the impact of these FTAs on supply chains can also help businesses design more resilient sourcing strategies. The PwC report, titled ‘Business imperatives of modern FTAs’, notes that these issues were not previously a priority for India in its FTAs. However, this has changed, and businesses need to be aware of the regulatory environment in these areas.
The inclusion of these regulatory issues in modern FTAs will have significant impacts on businesses. The report notes that climate change regulations could affect energy and resource-intensive sectors, such as manufacturing and agriculture. In addition, labour protection regulations could impact sectors such as textiles, leather, and agriculture. Gender inclusivity measures, such as equal pay and employment opportunities for women, could impact several sectors, including retail and manufacturing.
E-commerce regulations will also be crucial, as many industries have shifted to online platforms due to the COVID-19 pandemic. The report suggests that these regulations may affect e-commerce platforms’ taxation, data privacy, consumer protection, and intellectual property rights.
The report recommends that businesses monitor regulatory developments in these areas, engage with government bodies and industry associations to provide feedback on regulatory frameworks, and conduct impact assessments to identify areas of risk and opportunities.
The PwC report highlights the importance of businesses’ supply chains in the context of modern FTAs. It notes that anticipating the impact of these FTAs on supply chains can help businesses design more resilient sourcing strategies. For example, businesses may need to diversify their supply chains and reduce their reliance on a single supplier or region. In addition, businesses may need to review their contracts and renegotiate them to incorporate new regulatory requirements.
The report concludes that businesses that are prepared for regulatory changes and anticipate the impact of modern FTAs on their supply chains will be better positioned to take advantage of the opportunities that these agreements offer. By being proactive in their approach, businesses can design more resilient supply chains and mitigate the risks associated with changing regulatory environments.
