A day after Indian Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao smoked the peace pipe, New Delhi on Sunday said it is in discussion with Beijing for a free trade agreement aimed at breaking the duty barriers for bilateral trade.
"We have signed a comprehensive economic partnership agreements with Singapore and the Republic of Korea and recently a trade in goods agreements with the ASEAN. We are in discussions with Japan, China, Thailand and Malaysia and other countries to conclude agreements of a similar nature," Singh said at the 4th East Asia Summit in Thailand.
Faced with a huge trade imbalance in favour of China, the Indian industry is strongly against signing any FTA-like agreement with the neighbouring country. The Commerce Ministry has launched the maximum number of investigations for dumping its goods into the Indian market.
Against exports of $ 9.26 billion, imports from China into India totatalled $ 31.33 billion in fiscal 2008-09.
India is also in favour of creating a large Asian trade and investment community, while the Prime Minister said that the focus should presently be on creating of the domestic demand at the time of global financial crisis. However, at the government various study groups have been initiated.
"Our focus should be on generation of stronger domestic demand in Asian economies through investment in infrastrucutre, creation and strengthening of the social welfare...." Singh said.
Singh and Wen yesterday agreed that the two countries should handle carefully the differences over the borders which should not be allowed to act as impediments for harmony and cooperation.
It was important for the two fastest growing economies in the world to live in harmony to ensure that the present century belongs to Asia, both the leaders had agreed.
The Prime Minister said the vision of Asian economic integration by coalescing the FTAs among member Asian countries into an Asian Regional Trade Agreement is a pivotal step towards the integration of Asia into a common unit.
"This can lead to the creation of a broader Asian Economic Community," he said adding that there was a need to move forward in this direction and "exhibit the requisite political will".
He said economic integration amon the Asian countries could generate billions of dollars of additional output.
Referring the global financial crisis, the Prime Minister said," It is too early to say whether we are completely out of trouble."
The East Asia Summit institution has 16 countries. Besides the 10 nation ASEAN bloc, its members are China, Japan, South Korea, India, Australia and New Zealand. PTI