Regulatory simplification, not deregulation, is the cornerstone of effective economic integration between trading partners. Discuss with reference to India's recent trade agreement

GS2 Bilateral Relations
Regulatory simplification, not deregulation, is the cornerstone of effective economic integration between trading partners. Discuss with reference to India's recent trade agreements.

Discuss

  • 10 marks
  • 8 min
  • 150 words
  • Medium

The Hindu

Read article →

Economic integration delivers real gains only when regulatory environments match trade agreement ambitions. India's eight FTAs signed between 2022–2026 demonstrate this compellingly.

Case for Simplification

  • Dame Langley (2026): "Each year you add more — you rarely remove. Simplification is a very good word"
  • India–UK FTA: SEBI, IRDAI, RBI overlapping jurisdictions cited as primary market access barrier
  • India's insurance penetration: ~4% GDP vs. 7% global average → regulatory friction blocking genuine integration
  • EFTA: USD 100 billion investment facilitation → actualisation depends on regulatory ease, not tariff schedules

The Deregulation Risk

  • Complexity sometimes protects domestic MSMEs from asymmetric competition
  • Simplification-deregulation distinction blurs under foreign lobby pressure → 1991 lesson remains relevant

Conclusion India's DPI — Aadhaar, UPI — proves simplification through standardisation, not rule removal. Regulatory convergence must preserve policy space. FTA success depends on the ecosystem surrounding the text, not the text alone.

Total words: 151