For the first time ever, India has issued China a demarche on an economic issue. The stern diplomatic protest follows dissatisfaction over the lack of specific commitments by the Chinese government to facilitate the export to that country Indian goods and services, which are increasingly mired by restrictions.
India took the unusual move at the conclusion of a joint economic group meeting in Beijing on Tuesday. The Indian commerce ministry handed the demarche to its Chinese counterpart, listing specific items on which India expects China to take urgent action. Unlike official negotiations, where documents are exchanged in advance, the contents of a demarche are unknown to the other side until it is delivered.
The Chinese were, according to sources, taken by surprise by India’s move. At the crux of India?s concern is the sharp rise in the trade deficit with China?from $1.08 billion in 2001-02 to $22.05 billion on 2008-09?that both Indian industry and the government believe is exacerbated by the barriers the Middle Kingdom has erected on imports from India. The Indian government’s move shows how seriously New Delhi is taking the trade imbalance.
When contacted by FE, commerce secretary Rahul Khullar confirmed that such a demarche had indeed been delivered to the Chinese ministry of commerce. Recently, the US issued a demarche to China on the Google issue, but India has never pursued its trade dispute with any country to this extent.
According to government sources, several sector specific issues are listed in the demarche. Topping the list of priorities is the demand to ?allow immediate market access for all the remaining 14 fruits & vegetables? whose import from India is still restricted. Next is a demand to ?lift the ban on Indian export of de-boned and de-glanded bovine meat? and to ?clear the way for Basmati rice exports? from India.
The demarche also demands the ?removal of ?local content requirement? and recognition of the international IPR registration regime in order to create a favourable investment environment in wind/non-conventional energy.?
Suzlon in particular has expressed serious concern about barriers in this sector.
India has also requested landing rights and uplinking facilities for Indian TV channels. Zee TV is very keen on access to China. The document also urges greater access for Indian films to the Chinese market.
In pharma, another industry that has repeatedly expressed concern about problems, the commerce ministry wants ?complete removal of procedural bottlenecks, which delay introduction of Indian drugs in the Chinese market?.
India also wants China to ?remove tariff and non-tariff barriers on the import of power plant equipment and allow sufficient export of met-coke every year, without imposing any export duties, to meet the requirement of Indian industry?.
In terms of general, non-sectoral action, the New Delhi wants Beijing to ?encourage state-owned enterprises in that country to source more value-added goods from India?.