The meeting under the aegis of the China-India joint-group on Economic Relations, Trade, Science & Technology came amid threats of an escalating global trade war following the US plan to impose tariffs on $50-billion worth of Chinese goods, over and above an earlier plan to tax supplies of steel and aluminium from select countries, including China and India.
India and China have agreed to renegotiate a bilateral investment agreement, apart from working on a road map to reduce the massive trade imbalance in favour of the world’s second-largest economy, as the two countries pledged to bolster relations amid threats of a worsening global trade war, official sources told FE. China has also pledged to look into the sticky issue of greater market access to Indian farm products and agreed to resolve any issue that hurts the prospect of Indian pharmaceutical exports to that country, at a meeting between commerce and industry minister Suresh Prabhu and China’s trade minister Zhong Shan on Monday. The meeting under the aegis of the China-India joint-group on Economic Relations, Trade, Science & Technology came amid threats of an escalating global trade war following the US plan to impose tariffs on $50-billion worth of Chinese goods, over and above an earlier plan to tax supplies of steel and aluminium from select countries, including China and India.
Analysts said the China-India bilateral investment treaty remained in effect since August 2007 until its termination in July 2017, after India made it clear to all countries, with which it had similar agreements, that it wished to base such investment pacts on a new model text, mainly aimed at reducing litigations. The two countries now want to renegotiate to create a more stable and transparent regime for each other to catalyse greater flow of investments in a legally protected environment, the official sources said. The Chinese side agreed to improve market access for Indian agricultural products pertaining to non-basmati rice, rape-seed meals, soyameal, pomegranate, banana and other fruit and vegetable and bovine meats expeditiously. India, too, showed its willingness to examine any sticky issue hindering the supplies of apples, pears and tagetes seeds by China.
The two ministers reiterated commitments to promote a balanced and sustainable bilateral trade. India’s goods trade deficit with China has steadily worsened over the years — from just $0.6 billion in 2000-01 to a massive $52 billion in the first ten months of the current fiscal. Official data shows that China’s exports to India were 1.8 times of India’s outbound shipments to the country in 2000-01. But at $63.2 billion, what China exported to India in the first ten months of the current fiscal was more than six times of what India shipped out to China. The Chinese side noted India’s concern regarding ‘the long existing trade imbalance and requests for market access of Indian products and services and expressed its commitment to address these concerns through the broad framework provided by successive joint economic groups and the Five
Year Development Programme for Economic and Trade Cooperation between China and India’, the commerce ministry said in a statement. The two sides also reaffirmed commitment to rules-based, multilateral trading system under the World Trade Organisation framework, it said. Both the countries decided on medium and long term roadmap with action points and timelines for increasing bilateral trade in a balanced and sustainable manner, the ministry said. The two countries taken together account for 35% of the world’s population and around 20% of the global GDP, but the relative volume of bilateral trade is less than 1% of world trade.