Most of the industry associations want the government to pursue a defensive approach and raise customs duties while negotiating free trade agreements (FTAs), Commerce and Industry Minister Suresh Prabhu said Friday.
He said this while releasing a study by the Department of Commerce on India-China trade.
"Most industry associations want the government to pursue a defensive approach to FTAs and raise tariffs on the doctrine of domestic markets for domestic producers," the department said in a statement quoting Prabhu.
Protectionist policies are on the rise globally, he said adding the global use of protectionist measures in 2018 was unprecedented with the trade wars looming between two of the largest economies of the world.
In an FTA, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them. Besides, they liberalised norms to promote trade in services and promote investments.
The department said the report has tried to analyze the magnitude, extent and plausible reasons of India's rising trade deficit with China, which stood at about USD 63 billion in 2017-18.
Prabhu said India's trade relationship with China is unique and no other bilateral trading relationship evokes as much interest in India as the trade relationship with China.
"From being a small trading partner of India in 2001, within a span of fifteen years, China has rapidly become India's biggest trading partner. Trade between the two countries has been expanding but India's trade deficit with China has been growing," he added.
Further, the statement said that this analysis helps in studying whether an FTA or tariff concessions by China to India can be beneficial in increasing India's exports to China.
"The idea behind this exercise has been to identify whether tariff concessions by China to other countries impede raising the share of India's exports in the Chinese market," it said.
It added that these products can be taken up by India for negotiations with China under agreements like Asia Pacific Free Trade Agreement (APTA) in which both India and China are involved during the review exercise.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)