FTA may give China an upper hand, says Assocham

A free trade agreement (FTA) between India and China may put India at disadvantage as China enjoys an edge in the manufacturing sector as well as tariff rates, according to Assocham.
The industry chamber has pointed out that the benefits of an FTA between the two neighbours may accrue to China, at least in the short term.
"An FTA between the People's Republic of China (PRC) and India certainly goes in favour of PRC and is disadvantageous to India at least in the short run. This is because of the higher tariff regime in India," Assocham said.
"At this juncture, an FTA with China will reinforce the existing trade asymmetries between the two countries."

Indian manufacturing industry has in the past expressed its reservations over such an arrangement with China. The industry has been complaining of dumping of Chinese products in India, which has already imposed anti-dumping duties on them.
"In view of the comparative advantage China enjoys in the manufacturing sector, any form of trade agreement between the two has to tread cautiously. India's opening up of the trade sector has to be carefully calibrated to balance interests of domestic manufacturing over the medium term," Assocham said.

It suggested that Indian exports to China should move beyond primary goods.
To tap the huge Chinese market, Indian exporters should target China's demand for consumer goods and plug into its supply chain networks, the chamber said.

Prime Minister Narendra Modi is expected to visit China on May 14-16.