A free trade agreement (FTA) between India and the US should be set up immediately to provide an institutional arrangement to carry forward bilateral ties between India and the US, the Confederation of Indian Industry (CII) has said.
According to the chamber, the agreement should be structured around the following issues: tariffs, non-tariff barriers, technical barriers, knowledge-based industries and service industries.
As tariff is the most complex area, CII has suggested the following:
* The agreement should plan on zero-duty access for all goods from the US in 15 years, giving Indian industry enough time to prepare itself for competition.
* Tariff elimination should be carried out in three stages.
* The first set of items to be freed within five years of the agreement should be those without the import of which India would have serious problems.
* The second batch of items should be freed 10 years after the start of the agreement.
* The remaining items should be freed within 15 years.
* For each of the items, a road map would have to be drawn up preparing Indian industry for zero tariff access.
The CII has also suggested elimination of non-tariff barriers. There should be specific proposals regarding anti-dumping measures, subsidies and countervailing duties. The agreement should provide a bilateral dispute-solving mechanism with specific articles on anti-dumping measures, subsidies and social clause.
Technical barriers to trade is another contentious issue between India and the US. The FTA should lay down a mechanism, within the framework of the relevant World Trade Organisation agreements, for harmonisation of technical standards, inspection standards and procedures and quality control, thus eliminating technical barriers.
The agreement must also address barriers that can be imposed through valuation of goods, pre-shipment inspection, rules of origin, rules on packaging, shipment of goods and warehousing standards. The focus should again be on harmonisation of standards, CII said.
It has also recommended that issues related to knowledge-based industries and the service sector need to be built into the FTA. "The FTA must have clear and transparent rules on protection of patents, trade in knowledge products, e-commerce, Internet services, telecom equipment and services," CII said in a statement.
For the FTA to be successful, a detailed time-table for implementation must be spelt out at the time of adoption, the chamber said.
On negotiations, CII has recommended that the two countries constitute a high-powered negotiating committee at the ministerial level.
