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Trade deficit with China could become politically sensitive: Indian envoy

“The trade deficit with China is not economically sustainable and it can also become politically sensitive if we don’t take steps to address the deficit,”ambassador Vikram Misri has said.

india Updated: Jun 18, 2019 15:22 IST
Hindustan Times, Beijing
China,India,Indian envoy
Balanced trade is likely to be on the top of the agenda when President Xi Jinping visits India later this year.(Reuters File Photo)

The large trade deficit with China could become a politically sensitive issue in India if it isn’t addressed, ambassador Vikram Misri has said, adding that neither is the shortfall economically sustainable.

Balanced trade is likely to be on the top of the agenda when President Xi Jinping visits India later this year, a visit, described by Misri as the “centrepiece” of bilateral ties this year.

“It (Xi’s visit) is going to be the centrepiece of India’s engagement with China this year,” state-controlled China Daily newspaper quoted Misri him as saying in an interview published on Tuesday.

The Indian envoy, however, was clear about the pitfalls of skewed trade ties though he was optimistic that it set to cross the $100 billion in the future.

“That kind of deficit is not economically sustainable, and it can also become politically sensitive if we don’t take steps to address the deficit,” Misri told the newspaper.

Reports from India said in April that the trade deficit with China had been reduced by $10 billion to $53 billion in 2018-19 year-on-year India’s exports to China rose to $17 billion during the year from $13 billion during 2017-18, while imports declined to $70 billion from $76 billion.

On the state of ties between the two countries, Misri said New Delhi and Beijing have worked well in managing differences following the icy chill that had all but set in after the Doklam (Donglang) military standoff in 2017.

“It’s an interactive process,” Misri said, responding to a question whether relations are guided by pragmatism or has mutual political trust increased.

“There are obviously also certain differences between us, but I think, on the whole, we have done a fairly creditable job of addressing and managing our differences …sustaining this management of differences contributes to an extent in building trust, which in turn helps both sides to engage in more difficult areas of the relationship,” he said.

Misri said Beijing welcoming Prime Minister Narendra Modi’s reelection augured well for a smooth transition into the work of the new government in New Delhi.

“Strategic communication between the two governments has increased considerably, especially since the leadership summit in Wuhan, Hubei province, in 2018,” he said.

Speaking on energy security, Misri said it is a field where cooperation “is feasible even purely on the bilateral front and this is being explored between the two sides now”. He didn’t elaborate.

On counterterrorism, he said the need to join forces is apparent. India has unique challenges in this regard and it has maintained “a steady and close dialogue and interaction with our Chinese interlocutors”.

“We’ve seen progress in recent years and I imagine that we will continue to work on this front with our Chinese friends,” Misri said.

Responding to a question on the potential for cooperation on climate change and promoting globalisation, Misri said specific challenges may be different for the two countries, but broadly they emerge from the same areas.

“We share a number of views on the need to preserve multilateralism and obviously we also need to reform multilateralism or multilateral practices in certain areas but keeping in mind the larger developmental imperatives of our people,” he said.

First Published: Jun 18, 2019 15:22 IST