Nayanima Basu
Business Standard
September 27, 2013
Prime Minister Manmohan Singh would set off on a two-day official visit to China on October 23. He would discuss a wide spectrum of issues ranging from border disputes to economic relations with Chinese President Xi Jinping.
This would be Singh’s first visit to China after the change of leadership in that country.
One of the key focus areas of the visit would be the much-awaited talks on border issues, which China, too, was keen to initiate before the Lok Sabha elections in India next year, a senior Ministry ofExternal Affairs official told Business Standard. “The groundwork has already been made on the proposed border defence cooperation agreement. Under this, both sides would primarily agree not to carry out any construction work along the Line of Actual Control. Some positive movement is there,” the ministry official said.
The agreement would be significant in the wake of the recent spate of military face-offs and alleged incursions by Chinese troops along the Line of Actual Control in the Ladakh region. However, the implications of the proposed agreement are not clear. It is also not clear if this would mean India is agreeing to the earlier Chinese demand that India should not undertake any construction on its side of the Line of Actual Control.
Gautam Bambawale, joint secretary, Ministry of External Affairs, is already in Beijing to firm up Prime Minister Singh’s agenda.
In December, India would send Ashok K Kantha, secretary (east) in the ministry, as its next envoy to China.
On the economic front, the prime minister would raise the issue of greater penetration of Indian information technology and pharmaceutical companies into China, as well as the burgeoning trade deficit with that country.
“This is high time the prime minister moves on from Beijing and visits some of their business districts such as Shanghai, addresses the business community there and encourages it to invest here, while allowing Indian companies to operate there,” said Mohammed Saqib, secretary-general, India-China Economic and Cultural Council.
As India has a huge trade deficit with China, it is pushing China to source more products from here. In 2012-13, India recorded a record trade deficit of $40.78 billion with China, compared with $39.4 billion in 2011-12 and $27.95 billion in 2010-11, according to data from the Ministry of Commerce & Industry.
During Chinese Prime Minister Li Keqiang’s visit to India in May, both sides had agreed to increase bilateral trade from the current $68 billion to $100 billion.
“Indian companies present there are not getting orders from state owned companies. It has become a huge issue for us,” said an official from the Federation of Indian Chambers of Commerce and Industry.
As Chinese state-owned enterprises account for a large amount of public procurement, Singh is likely to urge the Chinese government to consider a policy of allocating a portion of this procurement for India.
“Getting access to the Chinese market has become very difficult. But this can be resolved if India allows investment-led trade with China, which it wants. We have to remove restrictions on bringing Chinese labourers here and allowing more Chinese investments to take place,” said Biswajit Dhar of Delhi-based RIS.
Recently, under the aegis of the Confederation of Indian Industry, small and medium enterprises from both countries signed deals worth $338 million, across a wide range of sectors.
Apparently, India has identified a list of 916 items of interest to be traded with China. This was discussed during the joint working group meeting held in Beijing in March this year.
Singh and Xi would also discuss trans-border river issues. Singh had raised this matter with the Chinese president when they had met on the sidelines of the BRICS (Brazil, Russia, India, China and South Africa) summit in Durban in March. The prime minister had expressed concern over China’s proposal to construct three dams across the Brahmaputra.
The two leaders would also take up the issue of the proposed BRICS development bank. They would also focus on local currency trading to reduce dependence on the dollar.
Collaboration to create the BCIM (Bangladesh, China, India and Myanmar) economic corridor is also likely to be discussed.
This would be Singh’s third meeting with President Xi. Both leaders had last met on the sidelines of the G20 summit in Russia.
