NEW DELHI: India and China are to discuss ways to defuse rising trade tensions between them next week, after a series of recent government
actions to impose restrictions on Chinese imports risks upsetting relations with the country’s largest trading partner.
China’s vice-minister of commerce, Zhong Shan, is to meet commerce secretary GK Pillai next Thursday to explore ways in which such trade restrictive actions could be minimised.
With the recession in key western markets hitting demand for Chinese exports, there has been a flood of imports into India from that country, sometimes at prices that hurt Indian industry. This has prompted the government to adopt various ways to check these imports to protect the local industry.
Earlier this year, India banned imports of Chinese toys, after it imposed restrictions on a variety of goods ranging from hot-rolled steel to radial tyres. The ban on toys has now been partially lifted.
New Delhi has also initiated 14 anti-dumping cases—instances where imports take place at prices lower than those applied in the domestic market causing injury to domestic industry—against China this fiscal year, of which preliminary duties have been imposed on two items.
India’s actions have come at a time China is being hurt by the slowdown in global trade, and has got the government there concerned. Mr Zhong met India’s ambassador to his country, Nirupama Rao, last month, and urged the need for better communication to ease trade tensions between the two countries.
China’s exports to India for the year to end-March 2009 is estimated to rise by 35% to more than $35 billion, up from $26 billion in the previous year, according to India’s commerce and industry ministry. Bilateral trade is estimated at $50 billion during the fiscal year up from $37 billion in the previous fiscal.
His visit comes at a time the government is considering imposing additional import duties called safeguard duties on items such as soda ash and other chemicals, which have seen a surge in imports recently, hurting local manufacturers.
“We have so far taken measures against imports from China or any other country by sticking to norms laid down by the World Trade Organization. However, we are open to discussions on any concern that China might have and will try to reach an amicable solution,” a commerce department official, who asked not to be named, told ET.
China’s total foreign trade growth eased to below 20%, the first time in seven years, to $2.56 trillion, according to data from the country’s General Administration of Customs.
Indian foreign trade growth has also slowed, with export growth expected to be less than 15% in 2008-09 to $170 billion. Indian exports in the last five months have been in the negative territory.
Source : The Economic Times