After several years of discussions with the Chinese, the government recently admitted that it was contemplating an India-China Free Trade Agreement (FTA).The agreement, if concluded, will be based on the “sensitivities of the domestic industry”, according to Minister of State for Commerce Jairam Ramesh.
“Sensitivities of freer trade with a manufacturing giant like China will essentially mean choice of products and services to be covered. Further, the government’s ability to strike a compromise between the expectations of the Chinese and the domestic industry’s wish list as well negative list,” says Pratik Jain, Director, KPMG.
The gains of an FTA will not be small as the terms of import of competitively priced Chinese capital goods (power and other infrastructure equipment will improve. Any deal cuts both ways.