India will ask China for increased market access for items such as farm products and pharmaceuticals to reduce the widening trade deficit between the two and remind it of its investment commitments at the joint economic group meeting on Monday.
“New Delhi will seek the revival of the ‘Five Year Trade and Economic Development Plan’ the two countries signed in 2014, under which Beijing promised to invest $20 billion, but very little of which actually materialised,” a government official told BusinessLine .
Beijing, on the other hand, would want the focus to be on trade remedies as it is not happy with the large number of anti-dumping and anti-subsidies action taken by New Delhi against imports from the country.
“China is also keen that cooperation at the multilateral forum be strengthened especially with the US targeting both the countries through targeted tariff increase like in the case of steel and aluminium. India has to weigh if such cooperation would go in the country’s favour,” the official said.
Chinese Trade Minister Zhong Shan and his Indian counterpart Suresh Prabhu will exchange their lists of demands and discuss ways to meet them when they meet on Monday at the eleventh session of the joint economic group (JEG).
China has agreed to the JEG meeting after a gap of three years. The trade deficit, in the meantime, has grown wider and it is even more important now to take steps to bridge the gap.
In 2016-17, India’s trade deficit with China was over $51 billion, which was almost half of the country’s total trade deficit with all trade partners. While India imported goods worth $61 billion, its exports were at $10 billion.
“New Delhi wants lower restrictions for export of farm products including rapeseed, soya bean oil, rice, sugar and buffalo meat and easier access for its pharmacetuticals and IT and IT-enabled services in order to lessen the burgeoning trade deficit.
“There is nothing new that is being demanded and Beijing has in the past promised to take action in almost all areas identified by India,” the official said.
For instance, several rounds of bilateral meetings have already happened between Indian and Chinese officials for sourcing of buffalo meat from the country, but China hasn’t yet started importing from India.
Anti-dumping measures
The increased use of anti-dumping and anti-subsidy measures being taken against Chinese products would also be on Shan’s agenda. “We will explain to China that the trade remedy measures taken so far are in line with WTO rules and the number appears big as India’s exports from the country is huge,” the official said.
Also on China’s agenda is the demand that its companies be provided a fair environment for competition in India and market access be provided for its apples and pears.