India, China agree to remove irritants in trade

Written by ASHOK B SHARMA | New Delhi | Updated: Mar 20 2009, 01:34am hrs
China, concerned over recent six-month ban by India on its toy exports on health and safety grounds, has called for boosting and diversifying the bilateral trade between the two countries. It has agreed to give India more market access.

India-China bilateral trade during 2007-08 was to the tune of $37.9 billion with the balance tilted in favour of China. Indias exports amounted to $10.8 billion while its imports were $27.1 billion. The major items of exports from India to China were iron ores, cotton yarn and fabric, organic and inorganic chemicals, precious stones and metals and machinery while the major items of imports from China to India were electrical machinery, organic chemicals, iron and steel, fertilizers and mineral fuel.

In the seventh session of the Joint Study Group (JSG) held in New Delhi on Thursday, it was recommended that the existing Joint Economic Group on Economic Relations and Trade, Science & Technology (JEG) mechanism be fully activated. The eighth session of India-China JEG would be held in Beijing.

The visiting Chinese Vice Minister, Zhong Shan said, both India and China need to tackle the current global economic crisis and recession. Both the countries together constitute 35% of the global market. We need to diversify our basket of bilateral trade and give more market access to each other. In our talks today we have reached a consensus on trade and investment. We have agreed to meeting of junior officer level of two countries every three months alternately in New Delhi and Beijing to sort out and remove the irritants.

Shan is leading an official level delegation to India.

China on Wednesday, stopping short of launching a formal trade dispute, has raised the issue of Indias import ban in the WTO technical barrier to trade committee. It said the ban was discriminatory and violated basic WTO principles.

Last Thursday China raised a US law blocking imports of Chinese poultry at a WTO meeting on food safety. US Representative Rosa DeLauro, who heads the congressional subcommittee behind that rule, said on Wednesday that the United States had serious issues with food imports from China.

When questioned about Chinas view on Indias import ban, Shan said, China will not resort to retaliatory measures. We are for settling the issue amicably. In our meeting India has raised the issue of dumping of Chinese goods and other irritants in trade. We have decided to give market access to each other. On the issue of Indias export of Basmati rice we have more or less agreed to the protocol. Chinese team would soon be visiting India to inspect Indias arrangements for Basmati rice exports. Indias exports of other agricultural products would be put on a fast track basis.

The Indian Commerce Secretary, GK Pillai said India has already explained to China the basis of the toy import ban from that country. Technical team from the Chinese side would meet the Director General of Foreign Trade tomorrow to sort out the issue, he said.

During the discussions, Pillai suggested to the visiting Chinese Vice Minister that two countries could gain a lot by providing faster market access to pharmaceuticals and drugs. He also urged the Chinese side for granting market access to 14 fruits and vegetable from India at the earliest, as it was pending since long. Both sides felt that there is a need for increasing bilateral investments between the two countries and the main sectors for investments could be petrochemicals, steel, healthcare, IT, automobiles, biotechnology, renewable energy and low-carbon technologies

Shan assured to cooperate with India in the WTO and in the G-20 group of the developing countries. He hoped to see the successful completion of the Doha Round at the earliest.