India-China bilateral trade set to hit $100 billion by 2015

RIO DE JANEIRO: In their 13th meeting in eight years, Prime Ministers Manmohan Singh and Wen Jiabao on Wednesday decided to take the India-China relationship to the next level by giving a boost to trade and priority to resolving the border dispute between the two countries. Going into a huddle on the first day of the Rio+20 conference here, the Indian Prime Minister, who calls Wen his ‘close friend’, and his Chinese counterpart agreed to take steps to ensure that the bilateral trade between the two emerging economies reaches $100 billion (about Rs 5,60,000 cr) by 2015. The two-way trade between the two countries reached $74 billion in 2011, with China becoming one of the largest trade partners of India and vice versa.
With the delegates and officials of almost all 190 countries present here keeping an eye on the India-China bilateral, the prime ministers of two emerging economies of Asia emerged from their 40-minute meeting after agreeing to boost trade and also give top priority to defence and security dialogue between the two countries.
Speaking to media after the crucial meeting, India foreign secretary Ranjan Mathai said during the meeting, the Indian prime minister invited Chinese investment in infrastructure in India. “The two leaders also decided to start the export of Indian rice to China soon,” the foreign secretary said, adding that the issue of trans-border rivers flowing in India and China also figured in the talks which took place on the sidelines of the UN summit on sustainable development.
Though it was not immediately clear in which sectors of infrastructure the Chinese would be allowed to invest, Indian diplomats said it was a major turning point in India-China relationship.
With almost all G-7 leaders, except French President Francois Hollande, skipping the meet, Manmohan Singh and Wen have been hogging all the limelight, especially because the draft of the declaration to be adopted at the end of the summit on Friday has a major imprint of G-77+China group. “The view of developing nations that eradication of poverty should be the top priority has prevailed over the adoption of green economy objectives. This couldn’t have happened without close coordination between India and China and summit host Brazil,” says an Indian delegate who has been part of nerve-wracking negotiations.
The closing of ranks by India and China at an important global meet can have long-term ramifications for the balance of power in Asia as well as the world at large. In the meeting, Wen said the two sides need to further consolidate their political and strategic mutual trust and ensure that their ties will move forward on the right track. "Under the current complex global and regional circumstances, China and India face mutual challenges and opportunities," Wen said.
On the question of boundary dispute between the two countries, the two leaders said the Special Representatives of India and China have been asked to prepare details of the joint work done so far. China also agreed to look into the issue balance of trade which is heavily in its favour. “The Prime Minister raised the issue of Indian trade deficit and the Chinese agreed to work with India in addressing the fact that India has a large trade deficit. They mentioned in fact specifically that they are arranging trade missions to India to improve access of Indian exports into the Chinese market. They are organizing commodity fairs. And they noted for example one of the changes which has happened recently is that rice exports from India to China will now be commencing,”Mathai told the representatives of Indian media organisations covering the Rio+20 summit.
Now, Indian exporters can soon begin sending basmati rice to China after both countries agree on a mutually satisfactory quarantine protocol. China has already cleared Indian exports of basmati rice following six-year process during which many hurdles that bar the entry of Indian rice into the Chinese market were overcome.
Negotiations on the issue of rice exports were on since 2006, when President Hu Jintao visited India. Finally, it was given a concrete shape during Hu’s visit to New Delhi for the BRICS summit in March.