Industry, govt not ready for FTA with China

A slew of trade and investment agreements will be signed between India and China during the visit of Chinese President Hu Jintao even though the Indian government and industry are not yet ready for a Free Trade Agreement (FTA) between the two Asian giants.

"A Bilateral Investment Protection Agreement (BIPA) and two protocols on easing export procedures for rice and iron ore to China will be signed during President's visit starting November 20," official sources said. The union cabinet has already cleared BIPA, which will be in force for 10 years.

The Chinese insistence for speeding up an FTA, however, has met with resistance from the government and the industry.

A joint task force, comprising officials and businessmen from both sides, has been set up for studying the feasibility of an FTA. "The task force has met twice and is expected to hold two more meetings to finalise its report by October next year," sources said.

During the visit of Hu, the Chinese side is also expected to seek a market economy status, a long-pending demand, from India.

Only 57 countries recognise China as a market economy, and it will get this status only by 2016 under World Trade Organisation (WTO).