India will not enter into any bilateral or regional trade-opening agreements at the cost of domestic manufacturing, the government has said.
"It will be ensured that such agreements (free trade agreements) do not have a detrimental effect on domestic manufacturing in India," according to the National Manufacturing Policy (NMP), cleared by the Union Cabinet on October 25.
While the Commerce Department is promoting the country's trade interest through liberalisation of bilateral or multi-lateral commerce, the Department of Industrial Policy and Promotion (DIPP) has worked out the policy that places emphasis on strengthening domestic manufacturing.
Both the departments, though headed by different secretaries, are under the charge of Commerce and Industry Minister Anand Sharma.
After implementing free trade agreements (FTAs) with the Association of South-East Asian Nations (ASEAN), South Korea and Japan, India is in the final stages of working out a similar deal with the 27-nation
European Union.
The EU is exerting a lot of pressure on the Indian negotiators to allow duty-free imports of European automobile and other manufactured goods under the proposed agreement in return for opening up their services sector.
The Indian industry, including some of the multinational companies which have invested in setting up manufacturing hubs in the country, are opposing the European efforts.
The NMP document, clearly spells out priority for the domestic manufacturing. "While India will continue to integrate itself with the globalised world through bilateral and regional free trade agreements/comprehensive economic partnership agreements, it will be ensured that such agreements do not have a detrimental effect on domestic manufacturing in India," it said.