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India and China plan $100b trade in 5 years |
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India and China have spelt out a clear strategy to scale up bilateral trade to $100 billion in five years from an estimated $60 billion in 2010-11.
After the summit, prime minister Manmohan Singh and Chinese premier Wen Jiabao met here on Thursday, the latter agreed to the imbalance in trade by providing greater access to Indian pharmaceuticals, IT services and agricultural products. Bilateral trade between the two countries is hugely skewed in favour of China, which enjoys a surplus of $19 billion. As a first step, cooperation between drug companies of the two countries will be enhanced, and China will give Indian IT services greater access to its market and sort out phyto-sanitary issues holding up farm exports from India.
China also committed to pushing Indian products and services across regional and its own trade platforms, apart from advancing trade facilitation. A joint communiqué reflected the shift in focus with trade and investment taking centrestage.
Commerce secretary Rahul Khullar told Financial Chronicle that achieving $100 billion trade with China was a distinct possibility. But he had a word of caution: “If the $40 billion additional import happens only from the Chinese end,it does not work for us.”
Khullar said China must work out a mechanism to correct the trade balance. “Trade worth $100 billion makes sense only when its 50 per export from India and 50 per cent import from China and not 80 per import from China, as it is happening today. This is an unsustainable situation,” he added.
China and India also agreed to expand economic cooperation in infrastructure, environment protection, information technology, telecommunications, investment and finance.
Chinese companies would invest in roads, railways and manufacturing in India. Both sides also agreed to encourage mutual investments and project contracting between enterprises of the two countries.
On Thursday, the two sides signed six agreements, providing for partnership in banking, green technologies, water resources, media and culture.
A memorandum of understanding (MoU) between China Banking Regulatory Commission and the Reserve Bank of India would have 10 banks from each country to operate in the other.
Similarly, an agreement between the Exim Bank of India and China Development Bank Corporation would support investments both ways. The Exim Bank chairman, T B A Ranganathan, told FC, “ The MoU will lead to financing industry projects in both countries, apart from exchanging information and knowledge.”
Asked if the two would set up a common fund pool to provide debt and equity finance to projects, Ranganathan said, “We have not yet looked at this.”
The agreement on green technologies would enable both sides to evolve energy efficiency techniques and exploit renewable energy sources.
The communiqué did not talk of a regional trade pact, but it committed both sides to strategic economic dialogue for policy cooperation. On the back of a water resources agreement, China would provide flood season data to manage flows in rivers that flow from that country into India.
However, no significant movement was visible on issues like China’s strategic support to Pakistan, resumption of military exercises between India and China, or the border issue. In fact, both held their respective positions on the north-eastern border dispute, while pledging to maintain border peace. The thorny issue of stapled visas remained unresolved. Tibet did not figure in the joint communiqué.
Source : mydigitalfc.com
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