NEW DELHI: Industry body FICCI has suggested that India should neither enter into a free trade agreement (FTA) with China, nor grant it ‘market economy status’, at least for the time being.
In a study on “Granting Market Economy Status to China: Views from Corporate India”, FICCI said that the idea of a full-blown free trade agreement with China is much ahead of its time, and India must wait before considering ‘market economy status’ for its eastern neighbour which is characterised by a different operating environment for business and range of subsidies.
According to the industry chamber, the Chinese industry enjoys ‘unfair advantage’ over their Indian counterparts due to an array of tax exemptions by Chinese government and artificially undervalued Chinese currency. Indian industry estimates that the Chinese products could enjoy a price advantage up to 30% over Indian manufactured goods.
On ‘market economy status’, FICCI said that China would need to take effective measures to make its’ pricing and accounting systems more transparent and market-oriented. So far 76 countries have recognised China as a market economy, but its top trading partners such as USA, AEU and Japan, which together account for 48% of China’s total exports, have refused to do so.
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