New Delhi: In a surprise turn of events, India and China on Tuesday agreed to draw up a medium- and long-term roadmap with action points and timelines to address the $51 billion trade deficit between them.
“The ministries agreed to meet more frequently to pursue this roadmap at an early date. It was agreed to consider (that) a round table would be convened between the two sides, shortly in China to prepare this roadmap to facilitate long-term sustainable and balanced trade between the two countries," said a copy of the minutes of the meeting between the two countries reviewed by Mint.
Minutes of the meeting were signed at the commerce minister Suresh Prabhu’s residence over breakfast on Tuesday.
It came a day after the 11th joint economic group meeting headed by Prabhu and his Chinese counterpart Zhong Shan ended on Monday with the two sides failing to issue a joint statement.
“We had a tough time convincing our Chinese counterparts to agree to a roadmap for addressing the trade imbalance," an Indian commerce ministry official said speaking under condition of anonymity.
However, a New Delhi-based trade expert seeking anonymity said China is known to make false promises on trade matters. “India should not get too excited about it," he added.
Acknowledging the significant growth in bilateral investment between the two countries, the minutes of the meeting said “Both sides agreed to the need to renegotiate bilateral investment agreement to create a more stable, transparent and predictable legal environment to facilitate greater investment on both sides."
The Chinese side reaffirmed their commitment to quickly accelerating market access for Indian non-basmati rice, rapeseed meals, soya meals, pomegranate, okra, banana and other fruits and vegetables and bovine meat. “The Indian side also agreed to accelerate/re-examine the issue regarding export of Chinese apples, pears and tagetes seeds into the Indian market," the minutes said.
On the non-tariff barriers faced by Indian pharma companies in China, the minutes said both sides reaffirmed their aim to find a resolution to the matter.
Without mentioning the trade war unleashed by US President Donald Trump, the two sides agreed to strengthen cooperation in the World Trade Organisation and other multilateral and regional frameworks, to maintain their common interests. “Both the sides reiterated their commitment to rules based multilateral global trade," it added.
The minutes did not mention the Regional Comprehensive Economic Partnership where both countries are members or the Belt and Road initiative that China is pushing India to join.
India has received $1.78 billion foreign direct investment from China from April 2000 to December 2017. India’s trade deficit with China stood at $36.73 billion during the April-October period of the current fiscal. The trade deficit had marginally dipped to $51 billion in 2016-17 from $52.69 billion in the previous fiscal. The bilateral trade between the countries increased to $71.42 billion in 2016-17 from $70.17 billion in the previous fiscal.