JOIN USIndia-China talks to narrow trade imbalance yet to take off
A proposed dialogue led by Union Finance Minister Nirmala Sitharaman and Chinese Vice Premier Hu Chunhua to work out a way to lessen the imbalance in bilateral trade and explore manufacturing partnership could not take place, even as almost eight months already passed after the two sides agreed to hold it.
Sitharaman and Hu were expected to co-chair a series of meetings to discuss ways to narrow India’s widening trade deficit with China. They, however, could not hold the first meeting itself, primarily due to lack of interest on the part of the Chinese government to schedule it.
The High-Level Economic and Trade Dialogue mechanism with the finance minister and the Chinese Vice Premier at its helm was set up on October 12 last year, when Prime Minister Narendra Modi and the Chinese President Xi Jinping had the second “informal summit” at Chennai.
Hu and Sitharaman were mandated to lead the series of dialogue to discuss ways to narrow trade deficit and raise volume of bilateral commerce and to explore manufacturing partnership.
The two sides agreed to set up the dialogue mechanism after Modi stressed during his talks with Xi on taking more measures to help narrow India’s widening trade deficit with China.
The volume of India-China bilateral trade grew by 13.34% to reach $ 95.70 billion in 2018. While the volume of bilateral commerce increased, the trade imbalance also widened from $ 51.76 billion in 2017 to $ 58.04 billion in 2018.
The bilateral trade during the period from January to November 2019 saw a 3.72% decline to $ 84.32 billion, with the gap being $ 51.68 billion. The “informal summit” at Chennai saw Modi and Xi agreeing to develop a “Manufacturing Partnership” between two countries to encourage mutual investments in certain sectors.
A source told DH that discussion on the proposed framework for manufacturing partnership could not make much progress over the past few months, as Beijing did not show much interest in working with New Delhi to take it forward.
After Modi and Xi held the first “informal summit” at Wuhan in China in April 2018, Beijing did take certain measures to allay New Delhi’s concerns and simplified its regulatory processes to allow more imports from India, particularly for pharmaceuticals and certain agricultural products like soybean, rapeseed and non-basmati rice.
While New Delhi took note of the initiative by Beijing to simplify the regulatory processes for certain products, it did not translate into a significant rise in export of the products from India to China.
New Delhi has since long been nudging Beijing to provide greater market access in China for India’s pharmaceutical products and Information Technology services.