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India rejects China's call for trade talks

Anirban Bhaumik, New Delhi, May 16, 2013, DHNS:

India has turned down China’s proposal to launch negotiations for a regional trade agreement citing the widening imbalance in bilateral commerce over the past few years despite a promise by former Chinese premier Wen Jiabao to address the issue.

Ahead of Wen’s successor Li Keqiang’s first visit to India, New Delhi made it clear to Beijing that it was not willing to start negotiations for a regional trade arrangement unless the latter took some serious measures to address its concerns over widening trade imbalance.  Though the recent border standoff at Depsang valley in Ladakh cast a shadow on the bilateral ties, China is keen to focus on its trade and economic relations with India during Li’s three-day visit to New Delhi and Mumbai commencing Sunday.

India-China bilateral trade grew from $61.74 billion in 2010 to $73.9 billion in 2011, but then declined to $66.57 billion in 2012.

India’s trade deficit with China, however, continued to grow steadily from $20.02 in 2010 to $27.08 in 2011 and $28.93 in 2012.


The trade imbalance continued to grow over the past years despite a specific promise Wen had made during his meeting with Prime Minister Manmohan Singh in New Delhi in December 2010. The two leaders had set a new bilateral trade target of $100 billion to be achieved by 2015, with Wen assuring Singh that Beijing would “take measures to promote greater Indian exports to China with a view to reduce India’s trade deficit” with China.

The measures promised by Wen included Beijing’s support for Indian participation in national and regional trade fairs in China, advancing trade facilitation, enhancing exchange and cooperation of pharmaceutical supervision and building stronger relationships between Chinese enterprises and Indian IT industry and speedier completion of phyto-sanitary negotiations on agro products.

But, notwithstanding Wen’s promises, not much had changed on the ground since 2010 and Indian companies continued to experience difficulties in doing business in China. Even the Indian IT and pharmaceutical companies have little penetration in China, despite achieving successes around the world.

Sources told Deccan Herald that New Delhi would express its concerns over growing imbalances in bilateral trade during the new Chinese Premier’s visit and would press Beijing hard to deliver on the promises made by Wen.

Chinese Vice Commerce Minister Chen Jian, however, told D S Rawat, secretary general of the industry body ASSOCHAM, in New Delhi on Thursday that Beijing was keen to help Indian exporters to market their products in China.

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