Confronted with a growing trade imbalance, India and China on Monday inked a slew of pacts, listed a host of measures and pitched for greater Chinese investment in India aimed at addressing the issue. The trade deficit has increased from $1.08 billion in 2001-02 to $40.77 billion in 2012-13.
The joint statement also set in place a road map for achieving, what the Chinese premier said as “dynamic balance” in trade as two countries strive to achieve the trade target of 100 US$ by 2015.
The bilateral trade target clocked 66 billion US $ last year with a deficit of 29 billion US$. The joint statement lists out the measures the two countries agreed to take to address the trade imbalance. These include cooperation on pharmaceutical supervision, including registration, stringer links between Chinese enterprise and Indian IT industry.
“The Indian side welcomed Chinese enterprise to invest in India and participate in India’s infrastructure development”.
“I would say, in the last few years certainly this was the most positive and most practical response that we have got at the high level from the Chinese side. Again some of it was in evidence in the agreements which were signed in terms of greater market access”, S Jaishankar, Indian ambassador to China said.
Sources aid Essar Group conglomerate is set to sign a $1 billion loan pact with China Development Bank and PetroChina during the trip, sources said. The series of memorandum of understandings (MoUs) signed on Monday are on exporting pharmaceuticals, buffalo meat and fisheries and an agreement on feed and feed ingredients to address the growing concern.
Commerce and Industry Minister Anand Sharma said the signing of the MoUs between India and China was a good beginning to address the issues India was raising with China from time to time. “All the sectors are of immense trade importance to India and India has clear price and quality competitiveness in these sectors to compete in the world market,” he said.
The Marine Products Export Development Authority (MPEDA) and AQSIQ also signed an MoU on co-operation for import and export of fishery products. The MoU aims to institutionalise co-operation in promoting trade of fishery products and healthy development of trade between India and China. India is expecting to export more to China through this co-operation.
Similarly, an MoU was signed between Pharmaceuticals Export Promotion Council of India (Pharmexcil) and The China Chamber of Commerce for Import and Export of Medicines and Health Products (CCCMHPIE). India has been finding it difficult to expand its trade with China in the pharmaceutical sector. The signing of the MoU is expected to facilitate access to the Chinese market in pharmaceuticals. The average imports of medicinal and pharmaceutical products from China during the last five years were $4332.37 million vis-à-vis exports from India of $692.44 million. An agreement was also signed between Export Inspection Council of India (EIC) and AQSIQ on trade and safety of feed and feed ingredients.
Bilateral trade between India and China had gone up from $2.09 billion in 2001-02 to a high of $75.59 billion in 2011-12; which tapered to $67.83 billion during 2012-13.