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Inter-ministerial group to assess trade agreement with China

Financial Express (New Delhi)

Inter-ministerial group to assess trade agreement with China


July 26, 2005

NEW DELHI, JULY 25: The government is planning to constitute a high-level inter-ministerial group to weigh the pros and cons of having some sort of trade/economic pact with China. The move comes close on the heels of the commerce and industry minister Kamal Nath’s recent visit to China for the Dalian mini-ministerial and the minor re-valuation of yuan by Beijing.

Official sources told FE that the group would “study the feasibility” of a bilateral economic/ trade agreement with China. It may be recalled that on his way back to India after the meeting, Mr Nath had suggested that it would not be prudent to go for a free trade agreement (FTA) with China at this juncture. Sources, however, said that the commerce department has just written to the department of economic affairs and a host of other ministries asking them to nominate their representatives in the proposed inter-ministerial panel.

Asked why was there a need to have such a panel given that a joint study group (JS) had earlier assessed, albeit peripherally, the benefits and risks of FTA with China, the sources said the proposed committee would deliberate upon the matter “in great detail.” “We will have to make an in-depth study of the impact on the domestic economy of any kind of trade/economic pact with a low cost and globally competitive economy like China,” said a government source. China has evinced interest on FTA with India. Large sections of the domestic industry are apprehensive about the adverse fallout of an FTA with China.

 source: Financial Express