India and China are yet to finalise a free trade agreement (FTA), but there is hope of a broader regional trade pact during Chinese President Hu Jintao's visit later this month, an Indian minister said on Monday.
"I am unable to commit if FTA is possible. But we will definitely consider a broader regional trade agreement (RTA)," said Minister of State for Industry Ashwani Kumar while addressing a meet organised by the Confederation of Indian Industry (CII) to launch a study on trade potential between the two countries.
"We need greater India-China engagement to dispel some of the contentious issues."
Kumar shared the analysis of the CII that greater synergy between the two countries could help boost bilateral trade to reach $30 billion by 2009-10 and $50 billion by 2010-11 from current levels of over $17.5 billion.
Urging Indian companies to brace up to competition not only from global companies but also from Chinese companies, he said that during Hu's visit "the focus will be on economic cooperation, possible free trade agreement and regional trade agreement, global issues, increasing security concerns and UN reforms".
To a query on why investment proposals from Chinese companies are being stalled, the minister clarified that "there can be no discrimination against Chinese investments".
He said the same yardstick was being used for clearance given to foreign direct investment proposals, including those from Chinese companies.
Referring to the CII study, the minister said the basket of Indian exports to China needs to be diversified to include more value-added products, particularly in areas like textiles and leather.
Stating that the two countries need to accept each other as competitors, Kumar said on the lines of the Chinese policy of mutual respect and cordiality for economic consolidation that India too had realised that its economic strength gives it better negotiating strength with China.
"India has been able to achieve a high growth of 8.5 per cent at less than 50 per cent of China's gross capital built up, as the growth is driven by technology, manufacturing and services growth," Kumar said.