India, China discuss reducing trade gap, peace along borders.

New Delhi: India and China on Tuesday discussed ways to maintain peace along their borders, reduce a ballooning trade imbalance, including a cut in import duties on Indian cotton fabrics, and sharing of river waters during the fifth round of their strategic dialogue.

Foreign secretary Sujatha Singh and Chinese vice foreign minister Liu Zhenmin discussed possible cooperation at international fora, the creation of an “open, inclusive and transparent architecture” in the Asia-Pacific region, and the outlook for Afghanistan after the exit of US-led international troops from the war-torn country, the foreign ministry said in a statement.

A visit to China by Prime Minister Manmohan Singh later this year, and the prospects for cooperation on a Bangladesh-China-India-Myanmar economic corridor were also discussed, the statement said.

The discussion, which is taking place after three years because of scheduling problems, focused on economic issues though it touched on ways to ensure peace on the border, said a person aware of the talks. He spoke on condition of anonymity.

India and China were engaged in a three-week-long tense standoff in April with India accusing the Chinese Army of entering 20km into Indian territory. The incursion threatened to derail a visit to India in May by Chinese Premier Li Keqiang, but was resolved when the troops retreated. The issue—stemming from an unresolved boundary dispute dating back to the 1962 India-China War—was discussed at a meeting between officials of the external affairs and defence ministries of the two sides last month in New Delhi.

Among the suggestions put forward by India to reduce a rising trade imbalance on Tuesday were halving of import duties by China on cotton fabrics to 5%, the person cited above said.

“This has immense potential of enhancing the cotton fabric exports by India from the current $700 million to $6 billion in the near term of three-five years,” the person said. India also urged China to initiate early implementation of a pact signed during Premier Li’s visit in May that will facilitate the export of meat and fish products that could narrow the trade gap, currently skewed in China’s favour, by $1 billion. India’s exports to China between January to June stood at $5.42 billion, while imports were $24.7 billion, according to India’s ministry of commerce.

Economist Charan Wadhva, a visiting fellow at the Centre for Policy Research, said the Chinese might be more amenable to making concessions in these areas. “But we should strive to get market access in areas where India has a comparative advantage to bridge the trade gap,” he said. “The strategic dialogue should look at greater market access of higher value added manufactured goods, to reduce the huge trade gap.”

The person cited above said that talks also focused on Chinese investment in Indian industrial parks. The idea of an industrial park for Chinese investments was first suggested in May during a visit to Beijing by Indian foreign minister Salman Khurshid. During talks, India also suggested that Chinese power companies exporting equipment to India set up centres here for servicing equipment, the person said.

Separately, commerce minister Anand Sharma, who met his Chinese counterpart Gao Hucheng, on the sidelines of the Association of Southeast Asian Nations commerce ministers’ meeting in Brunei on Tuesday, drew attention to “India’s pending request for facilitating Indian exports of pharmaceuticals, agricultural products, buffalo meat and information technology services”, a statement from the commerce ministry said.

“He was assured by his counterpart that China would make every effort to facilitate imports from India for bridging the trade imbalance,” the statement said, adding that a joint working group was likely to meet next month to discuss these issues in detail.

Source : livemint.com