NEW DELHI:The top echelons of the Chinese and Indian establishments have began sending signals that they desire a warmer bilateral trade relationship, even as the US continues to turn increasingly protectionist. On Monday, the Indian Commerce Ministry stated that China has promised to address India’s concerns about the trade deficit it carries with the former. India ran a mammoth $51.1 billion deficit with China during 2016-17.
The statement comes in the wake of a meeting between the visiting Chinese commerce minister Zhong Shan and Indian commerce minister Suresh Prabhu, where both ministers discussed addressing the trade imbalance, with India requesting greater market access for several agricultural products. “Chinese minister Zhong Shan welcomed Indian investment in China and promised to address the trade deficit between the two countries,” the statement said.
China’s promise to address the trade deficit issue is significant. The US’ current protectionist stance, with a particular focus on reducing its own massive $375 billion trade deficit with China, is likely to open a vacuum in trade that can be exploited by other countries like India. A DGFT source had told TNIE on Friday that India’s government was split between siding with the US despite its protectionism, or exploring other options like China. Meanwhile, the US has not left India out of its crosshairs, with challenges being raised at the WTO on India’s export subsidy schemes.
Meanwhile, India is also fast-tracking other important trade agreements. Commerce Secretary Rita Teaotia on Monday said that chief negotiators of India and European Union (EU) will meet later this month to talk on the long struck FTA (free trade agreement) between the two economies but India is unlikely to entertain the EU if they come with any pre-condition.
No separate UK pact until Brexit is complete
Commerce secretary Rita Teotia said there will be no pact between the UK and India until Brexit is complete. “While their trade minister has expressed interest and we will be interested… it is an important component of our trade with Europe. But, we need to wait till the contours of Brexit are clear.” Teaotia said.