China-US steel dispute may boost India's farm goods trade
26 March 2018
Amidst increasing pressure on India to open up its market for heavily subsidised US farm products by the Trump administration, India is looking to neighbouring China for boosting its sagging farm products trade.
Ahead of meeting between commerce minister Suresh Prabhu and his Chinese counterpart Zhong Shan in New Delhi this week, Indian and Chinese companies on Saturday signed 101 commercial deals worth nearly $2.37 billion.
The growing trade dispute with the US is also forcing China to improve its commercial ties with India, which is one positive outcome for India. Prabhu and Zhong are likely to discuss the recent US trade moves, which have targeted both India and China.
The commercial deals are expected to provide much-needed stimulus to trade in black tea, castor oil, peppermint oil, coco fibre, green coffee bean and other products.
US exports billions of dollars worth of farm products, such as corn, soybeans, pork and other commodities to China. US agricultural exports to China stood at $19.6 billion last year, with soybean shipments accounting for $12.4 billion.
Chinese companies are looking at India at a time when the Trump administration has imposed countervailing duties on $60 billion worth of imports from China to the US.
Beijing is now looking at plans for reciprocal tariffs on $3 billion of imports from the US to China, including farm products.
While representatives of 30 Chinese companies are currently on a visit to India, all of these may not find a lucrative market in India.
Also, with a huge negative trade balance of around $51.75 billion, India cannot open its market to Chinese goods indiscriminately. While India-China trade grew to $84.44 billion last year, India’s trade deficit with that country rose to $51.75 billion, up 8.5 per cent from the previous year.
Welcoming his Chinese counterpart Zhong Shan at the 11th meeting of India-China Joint Group on Economic Relations, Trade, Science and Technology at New Delhi today, Prabhu said the joint group between India and China is the oldest and the most important dialogue mechanism between the two countries.
Stating that addressing India’s trade imbalance with China is the most important issue to be taken up by the group, the minister exhorted his Chinese counterpart for greater market access for agricultural products like rapeseed, soyabean, basmati and non-basmati rice, fruits, vegetables and sugar.
Another commodity which could be exported from India to China is the high quality pharmaceutical products. 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.
Chinese minister Zhong Shan welcomed Indian investment in China and promised to address the trade deficit between the two countries. The minister highlighted the important issues discussed in the meeting like two-way trade relations, preparation of an action plan, greater focus on Regional Comprehensive Economic Partnership (RCEP) and e-dialogue.
Shan said that candid and effective discussions with India on trade relations can serve as the propeller for the growth not only between the two countries but in the entire region.