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Foreign Secy Shares Concerns Amid LAC Impasse


New Delhi: Foreign Secretary Harsh Vardhan Shringla on Thursday addressed concerns pertaining to bilateral ties between India and China along with the “widening” trade deficit between the two countries.

Calling China as India’s “largest neighbour”, he said: “With its GDP reaching USD 14.7 trillion in 2020, China’s economy is the second largest in the world. Under the shadow of ongoing COVID-19 pandemic, China is the only major economy to have registered positive growth in 2020. Being the largest contributor to the world trade and our largest trading partner, it is imperative for us to have a better understanding of China’s economy”.

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Foreign Secretary Harsh Vardhan Shringla was addressing a Seminar on “Leveraging China’s Economy” when he talked about the bilateral relationship between India and its neighbour.

“Our relations generally followed a positive trajectory since 1988 when we re-established contacts at the highest level. We were engaged in developing a broad-based bilateral relationship. The advancement of ties in this period was clearly predicated on ensuring that peace and tranquility were not disturbed. The areas of cooperation were not limited to bilateral but also had regional and global dimensions,” he said, as quoted in a statement by the External affairs ministry. 

“It was also recognised that relations between India and China were in the interest of not only our two countries but also in the interest of peace, stability and security in the region and world at large,” he added.

Elaborating on the trade ties between the two countries, HV Shringla said, “Last year, the total trade volume between the two countries was around US$ 88 billion. In the first nine months of this year, our bilateral trade touched US$ 90 billion, an increase of 49% over last year. At this rate, we are likely to attain the highest ever bilateral trade between two countries”. 

“The trade, however, remains unbalanced with a large trade balance in favour of China,” he added.

India’s Twofold Concerns On “Largest Trade Deficit” With China

Terming India’s trade deficit concerns as being “twofold”, the Foreign Secretary stated that the first concern is the actual size of the deficit, mentioning that the trade deficit for the nine months period stood at US$ 47 billion. 

“This is the largest trade deficit we have with any country. Second, is the fact that the imbalance has continuously been widening. There are a number of market access impediments including a whole host of non-tariff barriers, for most of our agricultural products and the sectors we are competitive in, such as pharmaceuticals, IT/ITES, etc,” he said.

He further informed that India has highlighted widening deficit and increase in trade barriers as issues of concern.

“These have been regularly flagged at the highest level, most recently at the 2nd Informal Summit between our Prime Minister and the Chinese President in Chennai in 2019. We also remain firm in our commitment of placing this trade relationship on a more sustainable footing and raising these issues at all appropriate occasions with the Chinese side,” he added.

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“Developments Along LAC Seriously Disturbed Peace” 

Talking about both COVID pandemic and the LAC faceoff, HV Shringla said: “Developments since then, including COVID-19 pandemic, have not been helpful in our efforts to address these (trade deficit) 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”.

India’s emphasis on ‘Atmanirbhar Bharat’ was mentioned as an initiative that offers greater capabilities for not just helping the nation alone but being a force for good in the international arena.

The Foreign Secretary said that the ability of India and China to work together will determine the Asian century. For this to materialise, peace and tranquility in the border areas is a sine qua non, he stressed. 

He has also expressed that the development of ties can only be based on mutuality – mutual respect, mutual sensitivity, and mutual interests should guide this process. “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 said.

These remarks as the 13th round of military talks between India and China to cool tensions in the eastern Ladakh region reached an impasse.

Indian Army in its statement revealed that the Chinese side was not agreeable and “also could not provide any forward-looking proposals”.

On the other hand, China, in an aggressive statement, accused India of “unreasonable and unrealistic demands”.


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