Sino-India FTA on slow track
The free trade agreement (FTA) between India and China has taken a back seat yet again with the government formally acknowledging that negotiations were not expected this year.
By TNN |
NEW DELHI: The free trade agreement (FTA) between India and China has taken a back seat yet again with the government formally acknowledging that negotiations were not expected this year.
The government will consult the industry before arriving at a final decision on the FTA, commerce and industry minister Kamal Nath has said.
The prime ministers of India and China, in consultation with the joint task group, have decided to refer the FTA report to the commerce ministers of both the countries. “I’ve just returned from China. We would examine the FTA issue.
The Joint Economic Group, chaired by me and my counterpart in China, will hold a meeting shortly to study the report. In the meantime, we would also consult the industry and the final decision would be ours,” Mr Nath told reporters, on the sidelines of Partnership Summit 2008 organised by CII, in collaboration with the government of Haryana and the ministry of commerce and industry, on Wednesday.
“Though we would continue to hold discussions on the Indo-China FTA, we are not expecting any negotiations this year,” he added. The Indian industry is against either an FTA or a preferential trading agreement as it fears that preferential tariffs would result in a greater flow of cheap goods from across the border making the domestic players uncompetitive.
India’s view that China is not yet ready to get market economy status is yet another reason for the postponement of the FTA. Since China’s accounting system is still considered non-transparent, India depends on third country figures to calculate dumping margins by Chinese companies.
If India gets into an FTA with China, it will have to grant market economy status to the country and in turn, have to accept the figures on quantities and prices provided by China for calculating dumping.
India, which has till date initiated the largest number of dumping cases against China, is not prepared to accept China’s numbers as it believes that the ‘unreliable’ figures will make it difficult to establish dumping in many cases.
The government will consult the industry before arriving at a final decision on the FTA, commerce and industry minister Kamal Nath has said.
The prime ministers of India and China, in consultation with the joint task group, have decided to refer the FTA report to the commerce ministers of both the countries. “I’ve just returned from China. We would examine the FTA issue.
The Joint Economic Group, chaired by me and my counterpart in China, will hold a meeting shortly to study the report. In the meantime, we would also consult the industry and the final decision would be ours,” Mr Nath told reporters, on the sidelines of Partnership Summit 2008 organised by CII, in collaboration with the government of Haryana and the ministry of commerce and industry, on Wednesday.
“Though we would continue to hold discussions on the Indo-China FTA, we are not expecting any negotiations this year,” he added. The Indian industry is against either an FTA or a preferential trading agreement as it fears that preferential tariffs would result in a greater flow of cheap goods from across the border making the domestic players uncompetitive.
India’s view that China is not yet ready to get market economy status is yet another reason for the postponement of the FTA. Since China’s accounting system is still considered non-transparent, India depends on third country figures to calculate dumping margins by Chinese companies.
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If India gets into an FTA with China, it will have to grant market economy status to the country and in turn, have to accept the figures on quantities and prices provided by China for calculating dumping.
India, which has till date initiated the largest number of dumping cases against China, is not prepared to accept China’s numbers as it believes that the ‘unreliable’ figures will make it difficult to establish dumping in many cases.
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