NEW DELHI: India’s trade deficit with China is estimated to have narrowed to $48.7 billion during the last financial year — the lowest in five years — compared with $53.6 billion a year ago, as imports from across the border dropped over 7% to $65 billion in 2019-20.
Last year’s trade deficit was roughly the same as the level seen in 2014-15, when the Narendra Modi administration first took office, but 34% higher than 2013-14, prompting the government to suggest that the steps taken by it in recent months have yielded results.
“It is not as if we are taking steps to reduce imports and reduce the trade gap now. We have been working on strategies for the past several months and going forward the results will be better,” said a source.
Commerce department officials said that the move to opt out of Regional Comprehensive Economic Partnership (RECEP) agreement, the proposed mega free trade agreement, will help it bridge the deficit with other steps such as faster trade remedies against subsidised or dumped goods too coming to the rescue of Indian industry. The fall in imports from China also helped the US extend its lead as India’s largest trading partner. Against trade of $88.8 billion with the US, India’s trade with China was pegged at just under $82 billion.
New Delhi: Refuting China’s accusation that India’s revised foreign direct investment (FDI) policy is discriminatory, officials have said that the revision neither restricts market access nor national treatment— the two tenets of global trade-—and is not violative of any rules of the World Trade Organization (WTO).
India, on Saturday, made its prior approval mandatory for direct or indirect foreign investments from countries that share a land border with it to curb “opportunistic takeovers” of domestic firms following the Covid-19 pandemic, a move which will restrict FDI from China.
Terming this move “discriminatory”, China on Monday said these “additional barriers… violate WTO’s principle of nondiscrimination, and go against the general trend of liberalisation and facilitation of trade and investment”.
Officials have rejected China’s claims on all the three counts of goods, services and investment.
Dismissing the claim on General Agreement on Tariffs and Trade (GATT) count, the official said the new norms do not directly affect goods, and also ruled out any link with the General Agreement on Trade in Services (GATS), explaining that the revised policy is not related to market access or national treatment restriction. “This does not automatically result in any equity cap or restriction. Only a formally different procedure is prescribed,” the official added. The principle of national treatment prohibits discrimination between imported and domestically produced goods and services with respect to internal taxation or other government regulation.
Market access for goods means the conditions, tariff and non-tariff measures agreed by members for the entry of specific goods into their markets.
On the investment front, the measure does not fall within the Illustrative List of the Agreement on Trade-Related Investment Measures (TRIMS), which details the measures that are inconsistent with the obligation of national treatment. “There is no WTO concern,” the official said.
Similarly, since India-China and India-Nepal Bilateral Investment Treaties (BIT) have been terminated, they only apply to investment already made into India prior to the termination.
Therefore, to the extent no retrospective action is taken to negate existing investments, there is no violation of the respective BITs. Incidentally, India is not only country to have tightened its FDI policies.
While Australia has said all foreign investment proposals will be assessed by a review board during the coronavirus crisis to prevent a sale of distressed corporate assets, Germany too has reportedly made the policy stricter to protect its companies.
NEW DELHI: India and China on Monday signed their maiden internal security cooperation agreement that among other areas of cooperation will involve intelligence sharing between two sides amid common threats from international terror.
The pact is expected to set up mechanism for cooperation between internal security establishments of the two countries for the first time. The pact is being signed during visit of Zhao Kezhi, China’s Minister of Public Security beginning Monday.
Kezhi held meetings with Home Minister Rajnath Singh during which they will discuss various aspects of security cooperation between the two countries, sources informed. Read the rest of this entry »
NEW DELHI: China plans to reduce tariffs on more than 8,500 goods, including chemicals, farm products and metals from India and some other Asian countries in what is seen as a part of its ongoing trade war with the US.
“China will reduce or cancel tariffs on imports of 8,549 types of goods from India, South Korea, Bangladesh, Laos & Sri Lanka,” China’s ambassador to India Luo Zhaohui tweeted on Wednesday. “The goods include chemicals, agricultural & medical products, soyabean, clothing, steel & aluminium products. Good news to help reduce trade imbalance.” Read the rest of this entry »
In just 10 years, China has built world-class MNCs that have graduated from making cheap copycats of western products to competing with world’s biggest MNCs. And now India is in their cross hairs. Indian companies have a reason to be afraid because they are not going to match the Chinese manufacturers who ride on aggressive pricing, state subsidy, protectionist policies and cheap finance.
Take smartphone-maker Xiaomi. Once considered a cheap copycat, it is now emerging as a leader in India. It plans to diversify into high-margin products such as electric vehicles and fast-track segments such as payment banking. Recently, it made a regulatory filing in India, stating its future game plan.
Given its runaway success in smartphones in a very short period, it can dominate auto and consumer goods segments in coming years. Read the rest of this entry »
LONDON: A Moody’s downgrade on China on Wednesday and the likelihood that Brazil and South Africa face further rating cuts in the coming months is highlighting how emerging market credit quality remains stuck in reverse. Since the start of 2014, Reuters analysis shows that the big three rating agencies – S&P Global, Moody’s and Fitch – have racked up more than 150 emerging market downgrades between them.
That averages out a roughly one a week and though there have been hopes that rising global growth and commodity prices will ease the pressure, that does not seem to be occurring yet.
India’s refusal to join China’s high-profile Belt and Road initiative is “regrettable” but New Delhi’s boycott will not at all affect the cooperation in infrastructure development among its neighbouring countries, a report in a state-run newspaper said today.
The two-day Belt and Road Forum which is being attended by leaders from 29 countries, including Pakistan, has been boycotted by India due to sovereignty concerns over the USD 50 billion CPEC (China-Pakistan Economic Corridor), which passes through Pakistan-occupied Kashmir.
“While India recently issued an official statement saying it would not be part of the “One Belt and One Road” (B&R) initiative, it will not affect the trend towards cooperation in infrastructure development among its neighbouring countries at all,” Global Times reported today.
“India was openly sceptical of China’s Belt and Road Forum (BRF) hours ahead of the opening of the event, mainly due to concerns over the China-Pakistan Economic Corridor (CPEC), a key project of the B&R, and whether it might influence the disputed Kashmir region,” it said.
Source : The Hindu Business Line
NEW DELHI, MAY 7: Amid increasing strain in Sino-India ties, China has proposed a four-point initiative to overcome differences and deepen relations which includes aligning its ‘One Belt One Road’ project with India’s ‘Act East Policy’ and restarting negotiations on a free trade pact.
The proposal put forward by Chinese envoy Luo Zhaohui also includes starting negotiations on a ‘China-India Treaty of Good Neighbourliness and Friendly Cooperation’ and prioritising finding an early solution to the border dispute between the two countries.
New Delhi: With less than a month to go before Prime Ministers of India and China are expected to meet post the NSG fiasco, the two countries have decided to set up a dialogue mechanism at the level of the foreign secretaries for the first time.
The decision to set up a new mechanism at the level of foreign secretaries was taken during a meeting between External Affairs Minister Sushma Swaraj and Chinese Foreign Minister Wang Yi, who was on a three-day visit to India.
“A new mechanism at the level of Foreign Secretaries agreed to discuss ties. It’s a new mechanism so earlier mechanisms remain,” said an official who was present in the talks.
The Foreign Secretary-level talks will be a new mechanism that will encompass all bilateral issues between both countries. This will be over and above the Strategic Economic Dialogue (SED) that both sides already have in place, sources told BusinessLine.
GUANGZHOU: China is poised to make huge investments in the coming months across sectors including the Narendra Modi government’s flagship projects from smart cities to Digital India as President Pranab Mukherjee on Wednesday nudged the Chinese leadership and business honchos to take advantage of prevailing growth rate in South Asia’s biggest country. Read the rest of this entry »