The Chinese President is expected to push for a Free
Trade Agreement, FTA, but India will not give in. CNBC-TV18
finds out why.
industry is talking approvingly of trade with China,
and it has much to cheer about. This year, two-way trade
is expected to cross $20 billion from just $2.9 billion
at the turn of this decade, surpassing expectations
and targets. Some industries like textiles that earlier
feared the Chinese, might have no such fear now.
general of Confederation Of Indian Textile Industries,
D K Nair says, "It is not India versus China, or
China versus India. Indian exports are growing and so
are China''s. India''s are growing faster and both are
doing well at the expense of others."
believes an FTA with eventual zero duties on most products
would create a powerful economic bloc. But India is
hesitating even though China is not the bugbear it used
are considering a broader regional trade agreement.
The implication of an FTA with China are being closely
studied and at this point, I am unable to commit whether
we will have one right now," says Ashwani Kumar,
minister of state in the commerce and industry ministry.
regional arrangement would be more like a preferential
trading arrangement, with eventual zero duties on an
agreed list of items. India is even comfortable with
China joining a regional trading bloc like ASEAN, as
there would be barriers for Chinese products to cross
like rules of origin, a change in classification and
so on. So there will be no free flow that would be injurious
to Indian industry.
ore, iron and steel, plastics and organic and inorganic
chemicals constitute the bulk of India''s exports to
China, while China''s exports are more diversified and
show a shift from resource-based manufactured products
to advanced technology products like machinery, video
monitors and and audio equipment.
joint study group and a high level task force have examined
the issue of FTA, but they have shied away from a recommendation.
India still regards China as a non-market economy, with
opaque costing. Indian industry also believes that Chinese
infrastructure puts it at a competitive disadvantage.
So the advice is make haste slowly.