India to press China to address trade imbalance

ansari-chinaIndia and China, Asia’s second and third largest economies, are poised to deepen their economic partnership, but New Delhi will like Beijing to address the issue of ballooning trade deficit promptly.

Issues relating to trade imbalance and economic relations will be discussed between India’s Commerce and Industry Minister Nirmala Sitharaman and her Chinese counterpart in Beijing this week.

Ms Sitharaman is accompanying Vice-President Hamid Ansari to China for the 60th anniversary celebrations of Panchsheel – the five principles of peaceful co-existence – that provides a framework for relations between the two Asian powers.

“It is a matter of concern to us that while trade is increasing, the imbalance in trade is not coming down. The two governments are seized of the matter…,” Vice-President Ansari told reporters on his way to the ancient Chinese city of Xian. In the wake of the global recession, India-China bilateral trade dipped from around $75 billion $65.45 billion last year, but the two Asian powers are working hard to scale it up to $100 billion by next year. The Chinese government is betting big on the business-friendly Modi government in India to set new benchmarks for economic relations with India.

Trade imbalance, which is estimated to be around $35-40 billion, has been a persistent cause of concern in India, with industry lobbies pressing the government hard to get China to address the issue of imbalance urgently. India’s IT and pharma companies have been trying hard to get access to China’s market, but without tangible success. Chinese Foreign Minister Wang Yi, who was in India early this month, has, however, assured the Indian leadership that Beijing will be rectifying trade imbalance through greater market access for Indian goods and through enhanced investment. These assurances are going to be reiterated when Vice President Ansari meeys his Chinese counterpart Li Yuanchao and calls on President Xi Jinping in Beijing. In this context, the in-principle clearance for setting up Chinese industrial parks is set to gather momentum in days to come.

 

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