CII chief calls for balanced India-US FTA; flags concerns over Foxconn, China’s rare earth curbs

Confederation of Indian Industry (CII) President Rajiv Memani on Thursday said that a “balanced and reasonable” free trade agreement (FTA) between India and the US should be pursued in phases, allowing complex issues with political implications to be addressed later.

India and the US are currently negotiating an FTA, with a Commerce Ministry delegation in Washington working to finalise a preliminary agreement ahead of the July 9 deadline set by US President Donald Trump for potential tariff hikes.

“We are expecting a balanced, reasonable FTA which will be done in tranches. Those areas which are more tricky, which require more consultation, have greater political ramifications, maybe dealt with later on,” PTI quoted Memani as saying.


India has expressed reservations over opening its agriculture and dairy sectors to US firms. The government is concerned about the impact on farmers and religious sensitivities related to dairy products.

Referring to the government’s preparatory work, Memani said, “The Ministry of Commerce has done a lot of preparation and engaged with various industries. In the Ministry of Agriculture, engagement has been limited. But I am confident that the challenges, particularly in sectors like agriculture, will be addressed.”

He added that not all industry players may benefit equally. “In all these things you will not always have 100 per cent winners,” he said.

CII President on Foxconn, China's rare earth curbs
Commenting on reports that Foxconn asked its Chinese engineers to return from its iPhone plant in India, Memani, without naming China directly, said, “When a Quad meeting is happening, there is some action that we see from some countries, and there are messages in a way.” The Quad alliance includes India, the US, Australia, and Japan.

On China’s export restrictions on rare earth magnets, Memani described the development as a “big concern” for India’s automobile sector, and pointed to broader risks due to reliance on Chinese supply chains. India also depends heavily on China for active pharmaceutical ingredients (APIs), crucial for drug manufacturing.

“In auto, I would say the concern is more serious than what's come out till now. Some of the most conservative companies are already starting to give guidance on lower production levels. There is definitely worry, and it's not limited to auto — it affects other sectors too,” he said.

India imports more than 53,000 metric tonnes of rare earth magnets annually. China dominates the market, accounting for over 60% of global mining and nearly 90% of refining. Tighter export licensing rules introduced by China have further disrupted global supply.

(With inputs from PTI)