Fears of ‘dumping’ from Chinese companies following the recent yuan devaluation are also expected to be discussed during the dialogue
A government-industry meet on Tuesday, which discussed the slowdown in China and proposals to convert the neighbouring country’s economic woes into an opportunity for India, will be quickly followed up with a high-level commercial dialogue with China next week.
During the six-day meeting starting September 14, the official Indian side led by commerce secretary Rita Teaotia is expected to take up concerns of the domestic industry including fears of “dumping” from Chinese companies following the recent yuan devaluation, besides the troubles faced by Indian companies in getting greater market access in China in sectors such as IT/ITeS, pharmaceuticals and farm products.
India wants China to ensure greater transparency and simplification regarding procedures concerning inspection, registration and clearances of imports (into China) from India.
Citing India’s burgeoning trade deficit with China, New Delhi is also likely to strongly encourage China to offset this trade imbalance by investing in the Narendra Modi government’s ‘Make In India’ initiative.
India is looking to push China to keep its word it (China) made last September (during Chinese President Xi Jinping’s India visit) to invest $20 billion over the next five years, including in industrial parks in India.
A business delegation is also likely to join the official delegation to explore investment opportunities in China, to forge joint ventures, and to boost exports from India including project exports.
India’s trade deficit with China had hit an all-time high of $48.5 billion in FY15 (or four times India’s exports to China in the fiscal) from just $1.1 billion in FY’04. In April-June FY16, the trade deficit has already touched $12.3 billion.
On the other hand, total FDI inflows from China to India during April 2000-June 2015 were just $1.1 billion (or a minuscule 0.4% of the total $258 billion worth total FDI inflows into India during the 15-year period), far below potential.
Other issues that could come up for discussion include complaints from Indian exporters against “spurious drugs made in China, branded wrongly as Indian and sold in overseas markets to damage the reputation of Indian drug companies”.
China had promised to invest and develop two mega industrial parks in Gujarat and Maharashtra, besides investing in infrastructure in India.
However, difficulties in obtaining the required land for these industrial parks has been the cause for delay, sources said. The industrial parks were meant to manufacture electronic products, power equipment, industrial machinery, apparel, active pharmaceutical ingredients and footwear, besides other value-added items.
They were then to be exported to China and other markets to boost India’s exports and at the same time reduce the trade deficit with China.
Also, despite promises at the highest political levels on removing barriers to enable Indian companies — especially in sectors that matters most to India (including pharma, IT/ITeS, farm products, media and entertainment, and auto components) — get better market access, there was not much response from the ground-level authorities in China to remove these obstacles, sources said.
Exporters had said the yuan devaluation will not only affect India’s exports to China (as their realisation will be lesser) but also make Chinese products more competitive than competing Indian items such as manmade fibres, garments, gems and jewellery, steel and organic chemicals in the international market, further hitting India’s overall exports