By Devangi Narang
Indian and Chinese companies signed 101 commercial deals recently worth nearly $2.36 billion (Rs. 15,389 crores). The trade stimulation comes ahead of a proposed meeting between commerce minister Suresh Prabhu and his Chinese counterpart Zhong Shan in New Delhi. The meeting is seen as a move to improve and stabilize bilateral relations between the two countries. The commerce minister-level meeting is part of a series of confidence-building measures aimed at stabilising ties.
Key highlights of the deals
The commercial deals signed by the Chinese and Indian companies aim to promote and boost trade in black tea, castor oil, peppermint oil, coco fibre, green coffee bean and other products. Furthermore, both the ministers will explore ways to reduce the swelling trade deficit, which stood at $51.75 billion in 2017- marked by a rise of 8.5% on a yearly basis. They will also discuss ways to expand bilateral commerce and make it more balanced. The recent U.S. trade moves, which have targeted both India and China, will also be a part of the discussion.
Representatives of 30 Chinese companies are currently on a visit to India for trade and investment purposes.
Did trade wars with US prompt China to reach out to India?
Commerce ministers of both the countries will discuss the recent trade war initiated by the US and various other issues related to world trade. They are meeting at a time when the American President Donald Trump has signed a presidential memorandum and imposed tariffs on up to $60 billion of imports from China to the US. Earlier, US had dragged China to the World Trade Organisation (WTO) over allegedly discriminatory technology licensing requirements in China.
China, in its first response to the US, announced plans for reciprocal tariffs on three billion dollars worth of imports from the US to China. The US exports billions in corn, soybeans, pork and other agro- commodities to China. US agricultural exports to China stood at $19.6 billion last year, with soybean shipments accounting for $12.4 billion.
The US has not even spared India. Earlier this month, it challenged India’s export subsidies scheme at the WTO. And last month, Trump expressed his displeasure over the high import duty imposed by India on high-end motorcycles such as the ones made by Harley-Davidson and other US companies.
The meeting is seen as a measure to improve ties and bilateral relations between China and India. Both the counties have not enjoyed good relations in terms of trade until last year. For instance, India was criticised by Chinese media on grounds of imposing anti-dumping duties on more than 93 Chinese products such as chemicals, machinery items, steel and other metals, fibres and yarn, rubber and plastic, electronics and consumer goods. Anti-dumping duties aim to create a level playing field for Indian manufacturers who are unable to match the lower prices offered by their Chinese rivals.
Nevertheless, it seems that the growing disputes between US and China have led to a positive and cheerful outcome for India, i.e. improved commercial ties with China.
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