Liberalise trade in gradual manner: Assocham

NEW DELHI: The government should open up trade with Australia and the EU in a gradual manner for the benefit of domestic players, rather than opening the market at once through FTAs, Assocham said today.

The chamber said industry should be given time to prepare itself to meet the challenges following a duty reduction on goods and the subsequent surge in imports.

"Instead of direct free trade agreements (FTA), India should first have a Preferential Trade Agreement (PTA) initially... so that India Inc can gear up for competition," Assocham said.

In FTA, the parties reduce tariffs (customs duty) on a host of tradeable products, while the duty cut under PTA is limited to select items.

India has FTAs with South Korea and ASEAN, among others, and PTAs with nations like Chile and Afghanistan.

Different business situations should be taken into consideration and a cost benefit analysis must be undertaken before moving ahead with FTAs, Assocham said.

"FTAs should lead to win-win situation," it said. The government is negotiating comprehensive FTAs with Australia, Japan, European Union and New Zealand.