Large number of FTAs to impact manufacturing sector: Ficci
Expressing concern over a large number of free trade agreements signed by India, industry body Ficci on Tuesday said it would make the country's manufacturing sector "uncompetitive".
"...there is a danger here that our manufacturing will become increasingly uncompetitive. People will import especially, when we have signed free trade agreements with ASEAN and Sri Lanka. We will import duty free, so manufacturing is under threat," Ficci Secretary General Rajiv Kumar said here at a seminar.
He said that instead of signing free trade pacts, the government should try to make similar arrangements within the country.
"...we need to sign one (FTA) with ourselves, because each state is a different country in some terms. If we market amongst ourselves that would mean onions from Nashik move to Delhi much faster rather than rot there...apples of Himachal Pradesh will not be just controlled by five traders in Azadpur mandi but can be moving all over the country," he said.
Under a free trade agreement (FTA), two sides heavily reduce or eliminate duties on maximum number of goods traded between them.
He said that the manufacturing sector contributes only 16 per cent to the country's GDP, which is very low.
"People will focus more on getting manufactured goods imported from China like Kanjivaram sarees than producing them here," Kumar said.
India has implemented free trade pacts with countries like Singapore, ASEAN, Malaysia and Japan.
He also said that the country's economy is likely to grow at about 8-9 per cent in the next five years.
Kumar said that the country's economy could touch over USD 3.5-trillion "if the share of manufacturing and agriculture sectors are increased from 16 and 14 per cent, respectively".
Issues like land acquisition, labour problems and policy reforms must also be addressed immediately to boost the manufacturing sector, he added.
"If these issues are not resolved in time, the entrepreneurs will shift to those sectors, where no land is required or into services sector," the Secretary General said.
On the global economic uncertainties, he said: "We are no anymore insulated and it is visible in the hike in gold prices here".