China-India FTA: Is the future imperfect?

The China-India bilateral relationship has always been influenced by three Ts: Territory, Tibet, and Trade. Although the political relationship due to border dispute and Tibet has been on the edge, the trading relationship between China and India has been moving forward steady. As the political relationship between China and India is becoming more strong and strategic, it is most likely that China and India to drive their economic relationship at higher level. In that respect, an Free Trade Agreement (FTA) between China and India is inevitable. The benefits of FTA such as free flow of goods, services, investments, technology, capital which can be beneficial for the development, stability, and growth of the countries as well as the region can be locked in by adopting a dispute settlement system with fair and efficient procedures and practices. Moreover, an inefficient dispute settlement mechanism can be an effective non-tariff trade barrier. In other words, it might be accurate to say that dispute settlement mechanisms which are inefficient and ineffective actually block trade. Therefore, the FTA between China and India, in addition to liberalization of economy and reducing the tariff; it should also contain a comprehensive rules of dispute settlement which is practical, efficient and effective. © 2014 Kluwer Law International BV, The Netherlands.