Industry & Economy
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Foreign Trade
Internal reforms vital to gain from FTAs, says FICCI
Our Bureau
New Delhi
,
July 22
THE Federation of Indian Chambers of Commerce and Industry (FICCI) has urged the Government to accelerate the pace of internal reforms so that the country could be better positioned to maximisegains from free and preferential trade agreements (FTAs and PTAs).
Alluding to the Government's plan to revisit India's FTAs and PTAs, the FICCI President, Mr Y.K. Modi, said that there were certain legitimate concerns about FTAs/PTAs currently under negotiation.
"If the Government review addressed them carefully, the overall impact of such trade agreements would be beneficial to the Indian economy," he said. In a submission to the Ministry of Commerce and Industry, FICCI opined that FTAs/PTAs could play a critical role in stepping up India's competitiveness provided they are accompanied by a sustained process of internal reforms. The internal reform process addresses the issues of flexibility in the labour market, lowers transaction costs and makes the infrastructure more efficient.
Also, it must be ensured that duty anomalies such as the `inverted duty structure' do not result from tariff liberalisation under different FTAs/PTAs. Otherwise, Indian industry would be rendered uncompetitive by "negative rate of protection," FICCI pointed out.
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