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India was not keen to get into a regional trading arrangement with China at this stage in view of the “unsustainable” trade deficit, Prime Minister Manmohan Singh has said.
In an interview to Chinese media shortly after landing in Beijing on a three-day visit, Singh pointed to the burgeoning trade deficit when asked about the regional arrangement that would make it easier for Chinese goods to be exported to India.
The PM pointed that the commerce ministers had been asked to explore this idea who would continue to hold discussions.
“I must be honest that there is a great deal of concern in our industry given the large and growing deficit in our trade with China,” Singh said. The trade deficit is expected to touch $40 billion this year.
Singh said the two countries would find it “more feasible” to discuss the trade agreement when conditions are “more propitious and trade is more even”.
The Prime Minister had earlier called the deficit “an unsustainable imbalance” and indicated India’s readiness to cooperate in setting up Chinese industrial parks to attract foreign direct investment as a means to reduce the deficit.
The Prime Minister is expected to discuss a range of bilateral issues during his visit, hailed as ‘historic” by the diplomats on both sides.
In a sign of the warmth between the two countries at different levels, Singh will also be hosted for lunch by former Premier Wen Jiabao at the prestigious Diaoyutai state guest house. It’s rare for a former Chinese leader to host a current leader on a bilateral visit.
Diplomatic sources said the banquet was included in Singh’s tight schedule in Beijing at Wen’s instance who wanted to meet Singh with who he had shared a warm relationship during Wen’s 10-year-tenure.
However, New Delhi indicated to China that the liberalised visa agreement was held back to convey New Delhi’s disappointment at two archers from Arunachal Pradesh being issued stapled visas ahead of Singh’s visit.
Government sources said Singh would take up the stapled visa issue with the Chinese leadership during his discussions with President Xi Jinping and Premier Li Keqiang.
Two archers from the northeastern state were not allowed to board a flight to China to participate in the World Archery Youth Championships because they were issued stapled visas.
There is acknowledgement in New Delhi that the stapled visas, by themselves, were not a problem. The government would encourage people to get stapled visas to travel to Israel and South Africa before India established diplomatic relations with them. Singapore – that has moved to e-visas – also issues visa on a separate sheet of paper.
“We will, however, not let someone from Arunachal Pradesh be treated differently,” official sources said, convinced that China – as well as New Delhi – did make too much fuss about such visas.
Pointing that China had been stamping visas to residents of Arunachal till the 1990s, sources said it clearly did not prevent them from laying claim to the state later. It is not clear why they issue stapled visas in any case.
The visa liberalisation agreement would have helped businessmen and professionals from both sides to get visas with ease.
Such pinpricks did not help in creating the right environment at a time when the two sides are trying to strengthen their strategic partnership,, an official said.