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Free trade on Manmohan-Wen talks table

After nearly 15 years, Congress leader and Prime Minister Manmohan Singh will set foot in Beijing on Sunday, reports Amit Baruah.

india Updated: Jan 10, 2008 01:30 IST
Amit Baruah

P.V. Narasimha Rao was the last Congress prime minister to visit China in September 1993. In 1992, the total value of India-China trade stood at $338 million, official figures show.

After nearly 15 years, Congress leader and Prime Minister Manmohan Singh will set foot in Beijing on Sunday. Bilateral trade in 2007 is believed to be about $38 billion, an increase of 100 times since 1992. Speaking at Beijing University, Rao had pointed out that for the “first time in recent times, people in India and in China are producing enough food to feed themselves”.

Clearly, the world has changed dramatically for both India and China since then. Their economic growth is being toasted in the world. And, the economy and trade will again be the focus of attention when Singh meets his counterpart Wen Jiabao on Monday and President Hu Jintao on Tuesday.

Singh and Jiabao are to be presented with the report of a joint task force to study the feasibility and benefits of an India-China regional trading arrangement in Beijing. It’s likely that the two prime ministers will call for actual negotiations on a regional trading arrangement, top government officials believe.

In fact, the massive growth in trade continues to surpass official “targets”. In November 2006, Singh and President Jintao set a trade target of $40 billion by 2010 when they met in New Delhi. That’s close to the actual 2007 trade figures. “By 2010, I expect our bilateral trade to hit $60 billion if not more,” Nagesh Kumar, director-general of Research and Information System for Developing Countries, told the
Hindustan Times on Wednesday.

There are, of course, concerns about the fact that India largely exports raw materials while importing finished goods from China. “The mind boggles at the expansion of our trade. It reflects complementarities in the economies of the two countries,” Kumar pointed out.

Will this growth in economic and trade relations and political contacts at all levels make it easier for the two countries, which went to war in 1962 and only restored ambassador-level ties in 1996, to resolve their border dispute?

“There is no direct link between the growth in economic contacts and the resolution of the boundary dispute between the two countries,” a former Indian diplomat, who worked in China, told this correspondent.

“But, yes, if the overall atmosphere between the two countries is improving, then it (the growth in trade) will have a positive impact on efforts to resolve the border issue,” the diplomat, who preferred anonymity, felt.

In 1993, India and China signed a landmark Agreement on the Maintenance of Peace and Tranquility along the Line of Actual Control in the India-China Border Areas while Rao was in Beijing.

“It’s a good treaty. It even allowed the army to pull back some forces,” Lt. Gen (retd) V.R. Raghavan said. By all accounts, including comments from External Affairs Minister Pranab Mukherjee, no dramatic breakthrough is expected on the border, with officials still negotiating a border settlement.

But, then, the border dispute hasn’t stood in the way of the two countries developing their relations in all directions, suspicions about each other notwithstanding. The growth in trade tells the whole story.