The free trade agreement (FTA) between China and India has long been anticipated as a potential game-changer for not only the two countries but also the global economy. Recently, both countries have shown an eagerness to push the agreement forward, with negotiations underway since 2004. Now, more than ever, the benefits of this trade agreement are being seen as both countries deal with the impacts of the COVID-19 pandemic.

Free trade agreements between countries allow for the removal of tariffs and other trade barriers, which can help promote easier access to each other`s markets and encourage cross-border investment. For India, the FTA with China would provide a significant opportunity to tap into China`s vast consumer market, which is already the largest in the world. By reducing the existing trade barriers, the Indian market could become more competitive, generating new trade and business opportunities that could boost the country`s economic growth.

As for China, it is looking to expand its market and reduce its reliance on the United States. India provides a similarly-sized emerging market with a rapidly expanding middle class and a growing appetite for Chinese goods, making it an attractive option for China. The FTA would also help to build stronger political and economic ties between China and India, smoothing out mutual tensions and increasing cooperation on regional and global issues.

However, the road to the FTA has not been without its challenges. One of the biggest hurdles for India is its trade deficit with China, which stood at $46.8 billion in 2019. India has had to contend with issues such as the dumping of goods by China, which has hurt the Indian domestic industry. Critics argue that the FTA will only exacerbate these issues and lead to the further erosion of Indian industries. Therefore, the Indian government must negotiate favorable terms to ensure that the FTA does not result in an unbalanced trade relationship.

Another major concern is the impact on local manufacturers. Chinese manufacturers have long been accused of producing low-cost goods, which can outcompete local Indian manufacturers. This has led to fears that the FTA could result in the erosion of the Indian manufacturing industry, which is a significant contributor to India`s economy. Therefore, any FTA agreement must include robust safeguard measures to ensure that Indian manufacturers are not adversely impacted.

Overall, the free trade agreement between China and India has the potential to be a game-changer for both countries, provided it can address the many pitfalls that it may face. It could provide new opportunities for businesses and promote economic growth and prosperity in both countries. However, the agreement must be negotiated with caution to ensure that it is equitable and balanced, benefiting both countries equally.