India and China will "demonstrate flexibility" in order to conclude the Regional Comprehensive Economic Partnership (RCEP) says visiting Chinese Commerce Minister Zhong Shan, who raised hopes of negotiations of a Free Trade Agreement (FTA) and even possible cooperation on the Belt and Road Initiative (BRI), which India has opposed, after talks between him and Commerce Minister Suresh Prabhu in New Delhi on Monday.
“Undoubtedly, this has given us high expectations for and strong confidence in a dance of the Dragon and the Elephant on the trade and economic front," Mr. Zhong said in exclusive comments to The Hindu , referring to 101 trade deals signed between both sides ahead of the 11th meeting of the India-China Joint Group on Economic Relations, Trade, Science and Technology.
Mr. Zhong called the meeting, which was the first high-level contact since the two sides agreed to a reset in ties after last years’ tensions over the Doklam standoff, a "complete success". The turn in ties came after Foreign Secretary Vijay Gokhale’s visit to Beijing in February, where a slew of bilateral engagements were put into place ahead of Prime Minister Narendra Modi’s visit to Qingdao in June for the Shanghai Cooperation Organisation (SCO) summit, including this one between Commerce Ministers in Delhi, while Defence Minister Nirmala Sitharaman and External Affairs Minister Sushma Swaraj will travel to Beijing to meet their counterparts in April.
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Mr. Zhong also called for cooperation between New Delhi and Beijing against U.S. President Trump’s recent trade sanctions and revision of tariffs on steel and aluminum, which he referred to as "acts of unilateral protectionism".
"It is in the interest of both China and India to uphold the authority and efficacy of the multilateral trading system," Mr. Zhong, said, adding that "In a world community of shared and intertwined fortunes, trade war hurts others as well as oneself and has no winners, bringing nothing but a serious negative impact on the world economy."
According to Mr. Zhong, India and China agreed to four major outcomes after their talks, including a decision to "promote synergy between China’s Belt and Road initiative and India’s development strategies", to "address the trade imbalances" of about $50 billion in China’s favour by welcoming Indian business in agricultural, pharmaceutical and IT sectors, to set up a special working group on two-way trade, and multilateral cooperation at trade forums like the RCEP, as well as promoting tourism and people-to-people exchanges.
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"Both sides will demonstrate flexibility to reach at an early date a modern, comprehensive and mutually-beneficial RCEP agreement of high standards. The two sides are also considering positively launching in due course negotiations on a regional trade arrangement or free trade agreement between China and India, so as to elevate the bilateral trade and economic cooperation to a higher level," Mr. Zhong told The Hindu .
Commerce Ministry officials said the talks had given new momentum to the RCEP negotiations, being discussed by 16 countries including the ASEAN bloc. India has been an outlier in talks, primarily because of a worry of giving China free access to its markets. However, an official present at the meeting discounted the Chinese Minister’s comments on possible cooperation with the Belt and Road Initiative, which would mark a major shift in India’s position, and said it was "not discussed and not on the agenda".
"Addressing India’s trade imbalance with China is the most important issue to be taken up,” a statement issued by the Commerce Ministry said. "The Minister exhorted his Chinese counterpart for greater market access for agricultural products and pharmaceuticals. Export of India’s IT and IT Enabled Services (ITES) to China and cooperation in the sectors of tourism and healthcare needs to be focused on," it added. Mr. Zhong told The Hindu that the situation was improving, however.
"In 2017, the bilateral trade reached 84.4 billion U.S. dollars, registering a growth of 20.3% from the year before and a record high. In particular, China’s import from India soared by 40%, helping to ease the bilateral trade imbalance," he said, crediting Prime Minister Narendra Modi and President Xi Jinping with "care and personal support" to bilateral ties.