New Delhi, Oct. 26
INDUSTRY has reacted with some concern to the Government's announcement to initiate free trade agreements with neighbouring economies, including Asean and the Gulf countries, by 2006.
Industry feels that the external reform process of the country is progressing at a faster pace than the internal reform process, which could prove to be a disadvantage for local manufacturers. If FTAs were inked without providing a "level playing field," it would discourage investment and inflow of new technology into the country, an industry official said.
Textile industry players said FTAs with least developed countries (LDCs) such as Bangladesh could result in cheaper fabrics and garments entering the country.
"The real worry could be for the domestic powerloom and the decentralised sector players, who might not be able to face competition from manufacturers from Bangladesh and other LDCs," a Confederation of Indian Textile Industry (CITI) official said.
Other manufacturing sectors such as auto components feel that the local industry must be provided with a level playing field before including these sectors in FTAs.