In the current scenario, as India evolving as an economic giant China wants to improve the bilateral trade between two countries. China has asked to allow duty-free imports of 85% products. A free trade agreement (FTA) between India and China would facilitate trade and other exchanges between them, a Chinese envoy said.
The FTA will also cover areas such as intellectual property rights (IPRs), investment, and government procurement and competition policies. This will be also an answer to the trade barriers in between two countries. India has already suggested to open its 70% of its market to Chinese products in a phased manner. But china has refused the proposal. It demanded 92% of indian market for duty-free access.
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India has a bilateral trade worth of $89.7 billion with china. But the trade deficit for India is $63 billion. Once the duty-free access will be given to the Chinese goods it will be dominant over the Indian market. And there will be a huge impact on the small indigenous industries. Where as 90% of the trade with other countries is based on free-trade.
India is trying to open its market for China gradually. And the tariff is being lowered within a phased manner. So that the Indian market can get enough time to improve their sustainability against the Chinese products.