India, China draw five-year plan to sail together through turbulent economy

ENS Economic Bureau : New Delhi, Tue Aug 28 2012, 03:03 hrs


As the growth engines of Asia’s two major economies — China and India — loses steam, the two nations have decided to join hands and battle the imminent slowdown. The countries on Monday agreed to draw a five-year plan, which include expanding commercial ties and weeding out hurdles from bilateral trade.

The two nations shed their adversarial roles and joined forces against global uncertainties at the 9th Joint Economic Group (JEG) meeting in New Delhi.

At the meeting, commerce and industry minister Anand Sharma announced, “We have agreed to work on a five-year plan between India and China on economic cooperation. We have identified the focal points and the nodal authorities who will be working together to put this development plan on India-China economic cooperation.”

The two sides also agreed to set up a joint working group (JWG) for all trade-related issues and investments, aiming at a $100 billion trade target by 2015.

“The JWG will be established soon, and will give its recommendations and assessment in 90 days,” Sharma told reporters.

Experts on trade said the move reflects willingness on both sides to recgonise issues obstructing bilateral trade between them.

“There are several trade-related issues between the two countries — be it related to mutual verification, certification or general facilitation of trade. There is a lack of recognition for each other’s system. These bottlenecks need to be removed. The five-year plan may be a good start towards this direction,” KT Chacko, director, IIFT, said.

Biswajit Dhar, director general, Research and Information System, said the announcement is recognition of growing trade relation between the countries.

Trade imbalance between the nations has grown over the years with trade deficit being $39.7 billion in 2011-12, heavily skewed in favour of China. While India’s exports stood at $17.90 billion, imports were $57.55 billion.

During the meeting, while India sought greater market access for its products ranging from pharmaceutical to IT and ITeS, China raised t he issue of high import duty on power equipment by India. Sharma assured that in the 12th five year plan, projects which have been issued final provisional mega certificates will continue to attract zero duty.


Fighting slowdown

* The countries on Monday agreed to draw a five-year plan, which include expanding commercial ties and weeding out hurdles from bilateral trade

* The two nations also agreed to set up a joint working group (JWG) for all trade-related issues and investments, aiming at a $100 billion trade target by 2015

* Trade imbalance between the nations has grown over the years with trade deficit being $39.7 billion in 2011-12, heavily skewed in favour of China

* While India’s exports in 2011-12 stood at $17.90 billion, imports were $57.55 billion