New Delhi: A slew of trade and investment agreements will be signed between India and China during the visit of Chinese President Hu Jintao, even though the Indian Government and industry are not yet ready for a Free Trade Agreement (FTA) between the two Asian giants.
"A Bilateral Investment Protection Agreement (BIPA) and two protocols on easing the export procedures for rice and iron ore to China will be signed during President's visit starting November 20," official sources said. Cabinet has already cleared BIPA, which will be in force for 10 years.
However, the Chinese insistence for speeding up an FTA has met with resistance from the Government and the industry.
For studying the feasibility of an FTA, a Joint Task Force comprising officials and businessmen from both sides has been set up. "The task force has met twice and is expected to hold two more meetings to finalise its report by October next year," sources said.
During the visit of Hu, the Chinese side is also expected to seek from India a market economy status, a long-pending demand.
The official-level Joint Working Group – a permanent mechanism to settle trade issues - has in its recent meeting failed to come at an agreement on it.
Only 57 countries recognise China as a market economy as under World Trade Organisation (WTO) it will get this status only by 2016.
India on its side would seek greater market access from China for agriculture including fruits, vegetables and grains.
"India is seeking access to 17 agri products. China has already agreed to import our rice, mangoes and grapes. The procedural bottlenecks are, however, coming in the way of exports of these products," officials said adding the protocol on rice would streamline it at least for one major commodity.
While the Indian industry is upbeat about the booming Sino-Indian trade, which is set to reach 20 billion dollars this year, it wants a gradual approach to an FTA.
"Till the Joint Task Force completes its study on the feasibility of FTA we should not rush in to it," Head of International Trade Division at the Confederation of Indian Industry T S Vishwanathan said.
The Indian industry feels that there are several vulnerable sectors like raw silk that can be hurt badly if trade is thrown open. Keen on stepping up economic engagement with the world's fastest growing economy, the Indian corporate sector would rather prefer a gradual way forward.
"India is talking to China on an RTA, for which we are quite keen. However, we should be gradual towards full fledged FTA," President of Federation of Indian Chambers of Commerce and Industry Saroj K Poddar said.
Assocham is also for a cautious move towards signing an FTA as desired by China. "Though we are quite excited about increasing volume of trade and investment with China, we should rather be gradual in signing an FTA," the chamber President Anil K Agarwal said.
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