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Wang Yi’s India visit opens up many possibilities

     

Posted on 10 Jun 2014

Last updated 28 Jun 2014 00:00:00 +0530

  India, China, Trade relation, Wang Yi

One of the major hurdles on the way of bilateral trade relation between India and China is the ballooning trade deficit in favour of the later amounting to about USD 40 billion. India has consistently been raising the issue of increasing trade deficit and seeking greater market access in China to bridge the gap.

Basudev Mahapatra

 

The meeting between Chinese Foreign Minister Wang Yi and Indian Prime Minister Narendra Modi on Monday, June 9, 2014, remained “constructive and cordial,” though it was only a courtesy call, according to the spokesman for India's Ministry of External Affairs, Syed Akbaruddin.

While meeting Modi, Wang delivered the written message from Chinese president Xi Jinping that noted: “Under your leadership, India will achieve greater development and progress. India and China are partners in long term strategic cooperation. Therefore, let’s work together to achieve peaceful cooperation and inclusive development for the benefit of our two people and in the interest of peace, stability and prosperity in Asia and in the world.”

During his two days diplomatic tour to India, Wang met his Indian counterpart Sushma Swaraj on Sunday where both the leaders appreciated the idea of injecting new momentum in their economic ties to explore untapped opportunities to take the bilateral trade beyond existing USD 65 billion annually.

As per the Indian ministry of external affairs, "There was a fairly long discussion on economic issues, trajectory of economic ties as well as the hurdles being faced in pursuing enhanced economic cooperation."

One of the major hurdles on the way of bilateral trade relation between two countries is the ballooning trade deficit in favour of China amounting to about USD 40 billion. India has consistently been raising the issue of increasing trade deficit and seeking greater market access in China to bridge the gap.

Statements from both the governments are, however, silent on this specific issue. Gautam Bambawale, Joint Secretary in-charge of China said, “Both the leaders agreed to expand economic ties.”

Apart from strengthening trade relationship, both the sides agreed to properly handle the boundary question, which is vital for India as it shares substantial length of boundary with China.

The two countries also agreed to speed up connectivity, synchronize India's "Look East" policy with China's acceleration of opening up to the west, and work hand in hand to advance cooperation projects, such as Bangladesh-China-India-Myanmar Economic Corridor.

The leaders also agreed to carry out commemorative activities for the 60th anniversary of the declaration by China, India and Myanmar of the Five Principles of Peaceful Co-existence or Panchsheel, set by India’s first Prime Minister Jawaharlal Nehru, in order to inherit and spread the spirit of the principles.

The first diplomatic initiative after Narendra Modi took charge as the Prime Minister of India missed several issues.

The major among them was the issue of Tibet which contains deep-rooted diplomatic differences between the two major Asian powers. While China has been denouncing the legality of the Tibetan government in exile and terms Dalai Lama a separatist, India has been a supporter of the Tibetan issue and has allowed the government in exile to operate from the country.

In Particular, the ideological big brother of the ruling party Bharatiya Janata Party (BJP), Rastriya Swayamsevak Sangh (RSS) is a strong supporter of the Tibetan cause.

The other long standing border issues are related to the Himalayan region of Ladakh and Arunachal Pradesh.

Apart from border dispute, China’s relationship with Pakistan has always been a concern for India. It’s the day China's foreign minister, Wang Yi, arrived in New Delhi, there were news reported about China’s building of military presence in Pakistan-controlled Kashmir.

“Even as Modi pursues closer economic ties with China, there have been reminders of deep suspicion from India's security establishment,” the New York Times said.

In spite of all these sensitive issues, India still needs to maintain good relationship with China not only for its economic growth but for many other reasons.

Increase in energy needs added with a shortfall in domestic energy production, particularly hydrocarbons, has been alerting India to look for energy-rich countries for imports.

Though India and Russia have launched a joint study into the possibility of direct ground transportation of oil, experts believe, the unstable political environment in Pakistan and Afghanistan is considered to become obstacles on the way of importing hydrocarbons from either Russia or even Central Asia.

In such a case, an oil pipeline proposal from Russia to India through China would be an important step forward. The pipeline, starting from the Russia's Altai Mountain region, would reach northern India passing through China's Xinjiang Uyghur Autonomous Region.

With China opening its door for Russian oil to flow through its territory, this creates an opportunity for India to even pursue its "Connect Central Asia" policy.

And, to realize the 2050 economic dream, based on a forecast made by Goldman Sachs in 2003, India and China have to have good relation to become the first and third largest economies by 2050.  With other two BRIC (Brazil-Russia-India-China) nations like Brazil and Russia capturing the fifth and sixth spots, the club can form a bigger economic entity if the two major Asian economies work together, for which good relationship between two countries is most important.

So, the recent visit of Wang Yi to India can be counted as a step forward in this regard which is expected to go further and farther with more diplomatic visits and talks by leaders of both countries.

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