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Local manufacturers to be hit due to FTA
By agencies
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Thursday, 27 October 2005, 19:30 IST
NEW DELHI: IndiaÂ’s planned Free Trade Agreement with neighboring states has become a cause of concern for the domestic industry.
The industry has reacted with some caution even as the Government is going ahead with free trade agreements by 2006.
Industry feels that the external reform process of the country is progressing faster than the internal reform process, which could prove to be disastrous for local manufacturers. If FTAs were inked without providing a "level playing field," it would discourage investment and inflow of new technology into the country, an industry official said.
Other manufacturing sectors such as auto components feel that the local industry must be provided with a level playing field before including these sectors in FTAs.
Prime Minister Manmohan Singh yesterday had asked the Finance and Commerce Ministries to speed up work for finalization of free trade agreements (FTAs) with all its neighbors by 2006 and take measures to reduce the trade deficit with them, particularly the less-developed nations such as Bangladesh, Bhutan, Maldives and Nepal.
This will be done through the South Asian Free Trade Agreement (SAFTA) envisaged by the South Asian Association for Regional Cooperation (SAARC) and FTAs with the Association of South East Asian Nations (ASEAN) and the Gulf Cooperation Council (GCC).