He said the Indian industry should look at ways to reduce import dependence on China and manufacture goods here.
“This is one area where there has been mixed views from various quarters, but I would say that investments from China are certainly welcome, technology from China is certainly welcome. But I think in terms of the open trade with China, we need to be very careful and measured in our approach,” CII President R Mukundan told PTI in an interview.
He made the remarks while replying to a question on whether India should consider a free trade agreement (FTA) with China.
China has overtaken the US to emerge as India’s largest trading partner in 2025-26, with bilateral trade reaching USD 151.1 billion.
India’s exports to China rose 36.66 per cent to USD 19.47 billion during the last fiscal year, while imports increased 16 per cent to USD 131.63 billion. The trade deficit swelled to an all-time high of USD 112.6 billion in 2025-26 as against USD 99.2 billion in 2024-25.
India was initially part of the 16-member RCEP (Regional Comprehensive Economic Partnership) group, which was negotiating a trade pact, but opted out of the grouping in November 2019. The members of RCEP include 10 ASEAN member countries and China. Mukundan also said areas where Indian firms can increase collaborations with China include battery storage, mobility batteries, specific chemicals which has usage in semiconductors, and other areas where they have best of the technologies.
On trade pact with the US, Mukundan said America is the largest export destination for Indian exporters and the agreement is going to power that even more.
India and the US are negotiating a bilateral trade agreement (BTA). US Trade Representative Jamieson Greer is here to hold talks with Commerce and Industry Minister Piyush Goyal on the interim trade pact.
“As long as we are having a (tariff) rate which is comparable or better then the competing peer countries which are exporting (to the US), I think we should be fine,” he said, adding, “we need to have at least equal to or slightly similar to what other countries are getting and we should not have disadvantage there”.
These remarks are important as India is seeking a tariff advantage over competing exporting countries such as Asean, Sri Lanka, and Bangladesh, in the trade pact with the US.
To further attract foreign direct investment (FDI) into India, the President suggested that the government launch a targeted sector-specific FDI strategy to attract technology-intensive investments into high-growth sectors such as semiconductors, electric vehicles and artificial intelligence.
He has called for strengthening policy predictability through structured industry-government consultation mechanisms and transparent transition periods for major regulatory and FDI policy changes.
“The inverted duty structure for imports should be reviewed and corrected. Focus on attracting investments from developed economies to decarbonise carbon-intensive sectors,” he said, adding that there is a need to approach the top-100 global manufacturers across sectors to attract them into the country.
“Reach out to them and give them a passport and concierge services,” he added.
A dedicated official should be assigned to investors to ensure that any bottlenecks faced by them are taken up with the relevant ministries and resolved in a time-bound manner.
Further he also asked for review of existing QCOs (quality control orders) on raw materials and intermediate goods by undertaking an impact assessment of these orders on India’s export competitiveness, considering the presence of adequate domestic manufacturing capacity and quality of products manufactured locally.