Chinese commerce minister to arrive in India to discuss trade
March 26, 2018 09:23
Chinese Commerce Minister Zhong Shan reaches New Delhi on Monday for official trade talks.
Against the backdrop of a possible trade war between the United States and China, India is looking to get China to reduce tariffs on our export, senior government officials suggested, reports Subhayan Chakraborty in Business Standard.
The bilateral engagement, under the aegis of the India-China joint economic forum, will be significant for India since Beijing has decided to discuss Indias ballooning trade deficit, commerce and industry minister Suresh Prabhu said.
India's import from China was $61.3 billion and exports stood at a much lesser $10.2 billion, leaving in its wake a massive $51.1 billion trade deficit in 2016-17.
The government has been worried by increasing friction between the US -- India's largest export destination -- and China, India's largest import source, which could lead to a fall in global demand and rise in the cost of trade.
However, Delhi also feels the current situation offers an opportunity to push for trade concessions from Beijing.
"After the lengthy military standoff between both nations at the disputed Doklam plateau of Bhutan, further conclusive talks on trade issues looked slim but Shan's visit signifies they want to engage a major trade partner," an expert said.
Both nations signed an agreement in September 2014 to achieve bilateral trade balance by 2019. The five-year programme is a joint medium-term road map for promoting trade and investment.
"The agreement acknowledges the pitfalls of one-way trade but since it is non-binding, the scope of deliberations with regard to reducing the trade deficit depends heavily on intent, as well as the presence of a free environment for discussion," a senior commerce ministry official said.
The agreement also talks of easing of restrictions by the Chinese government against high potential export items from here, such as bovine meat, fruit & vegetables and basmati rice. Of these, only basmati has seen a breakthrough, with 14 firms allowed to export to China in 2016.
The government is throwing its weight behind a long-term plan of revising the export basket to China. Raw materials like cotton, iron ore and copper have come under scrutiny as the government and exporters try to shift priorities towards value-added products. The ministry has identified key sectors such as hardware, electronics, pharmaceuticals, textiles and auto components to boost export.
"The government aims to slowly but steadily revise its export basket to China, so that over the next few years, higher forex-earning value added goods make up the majority of export rather than raw materials," the official said.
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