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New Delhi: Indian foreign secretary Harsh Vardhan Shringla on Thursday said that India and China are likely to attain the highest-ever bilateral trade this year, even as he asserted that the continuing India-China stand-off has had “an impact on the broader relationship” and on resolving concerns over trade deficit and market access.
Speaking at a seminar on “Leveraging China’s economy”, he said the relations between India and China had gone on an upward trajectory since 1988, the year of the visit of former prime minister Rajiv Gandhi to Beijing. “The advancement of ties in this period was clearly predicated on ensuring that peace and tranquility were not disturbed,” he said.
Since May 2020, Indian and Chinese troops have been on a stand-off at multiple points along the Line of Actual Control (LAC) in eastern Ladakh. This military friction has led to the first casualties at the border in over four decades. While the two armies have withdrawn from their positions at two points, there are two other stand-off locations where there has been no headway despite multiple rounds of talks.
However, despite that trade has continued to grow between the two countries. “Last year, the total trade volume between the two countries was around $88 billion. In the first nine months of this year, our bilateral trade touched $90 billion, an increase of 49% over last year,” said Shringla.
This means that the trade volume will reach unprecedented heights in 2021. “At this rate, we are likely to attain the highest-ever bilateral trade between two countries”.
However, he added that the trade deficit continues to increase with China. “Trade deficit for the nine months period stood at $47 billion. This is the largest trade deficit we have with any country.”
He also noted that there are market access barriers for most Indian products in the agriculture, pharmaceutical and IT sectors.
Shringla asserted that India had raised these issues with the Chinese at the highest level, including at the second informal summit in 2019.
However, he acknowledged that there had not been much progress, especially with tensions at the border. “Developments since then, including COVID-19 pandemic, have not been helpful in our efforts to address these concerns. Furthermore, the developments along the LAC in Eastern Ladakh have seriously disturbed the peace and tranquility in border areas. This has obviously had an impact on the broader relationship too.”
Quoting the Indian foreign minister, Shringla said that for India and China to work together to determine the Asian century, “peace and tranquility in the border is a sine qua non.”
“We hope that the Chinese side will work with us to bring a satisfactory resolution to the current issues so as to make progress on our bilateral relations keeping in view each other’s sensitivities, aspirations and interests,” he added.