New Delhi: India industry should be prepared for FTAs with other countries and should focus on the preparedness and readiness to enter in to FTAs. This was stated by Mr P K Dash, Joint Secretary, Ministry of Commerce and Industry, Government of India at the India-Asean Round Table organized by the Confederation of Indian Industry (CII) on 16 April.
It is impossible to guarantee that all the sectors in the economy stand to gain with FTAs in the short-run, and maximization of the overall national welfare from the FTAs should be the primary objective, he said.
The industry view was that the sensitive list of products which today stand at 709 will have to be cut to about 550 and the sectors, which need to accommodate these cuts, are textiles, chemicals and auto.
In the sensitive list, the tariff lines were not to be brought to zero duty. But the 150 items that will be moved out of the sensitive list will have to be brought down to zero by 2018. The 16 products in the agriculture list will, however, continue to be on the negative list. This pruning is expected to be done in a month’s time,
The government fully considers the sensitivities of the domestic industry. Even at this point, there were difference between Asean and India over the Rules of Origin, with India insisting for a standard criteria.
Referring to the concerns of the textile sector, Mr Dash assured that the Product Specific Rules (PSR) have been agreed upon by both sides, to deal with the cheap imports from Asean countries, mainly Vietnam.
In the garments sector, India already faces competition from the immediate neighbourhood. Also about 10% of India’s exports land up in the Asean markets and our imports are considerable. This makes FTA extremely relevant with the Asean.
India already has FTA with some countries and is currently negotiating with Korea, Japan and EU. FTA with China, Australia, New Zealand and others will also happen some time in future. So if India is to wait for appropriate time then it would be too late and would be left behind in terms of market access to competing countries