New Delhi, June 10: India Inc will be hit hard as cheap imports are expected to flood the market under the India-Thailand free trade agreement (FTA), according to a survey by Federation of Indian Chambers of Commerce and Industries (Ficci).

Drawing sharp reactions from certain quarters, the survey pointed out that the new trading dispensation would result in a huge surge in the imports from Thailand. While exports from India will not benefit, given the small size of the Thai market.

According to the survey, industry has been complaining about the higher cost of infrastructure services in India and the huge difference in interest rates between the two countries.

For example, electricity cost in Thailand is Rs 2.50 per kilowatt-hour (KWH) compared with Rs 5.50 per KWH in India. The average interest rate in Thailand is 4 to 5 per cent against nearly 13 per cent in India.

Outlining the issues of concern of companies that produce goods listed in the 82 items for the early harvest import from Thailand, the survey said, internal cost disabilities were eroding the competitiveness of domestic companies.

A comparison of import duties on certain raw materials in India and Thailand revealed that major inputs such as glass parts and chemicals (used by colour picture tube manufacturers) could be imported free into Thailand, but attract a 15 per cent duty for Indian importers. Similarly, alloy steel and stainless steel attract 5 per cent higher import duty in India than in Thailand.

In order to gear up for competition with Thailand, 32 per cent of the respondents in the survey said they were focusing on improving productivity. Another, 28 per cent said they had implemented cost cutting measures.