China offers free trade pact, more market access

New Delhi: Chinese Premier Li Keqiang, today, offered to initiate talks for a free trade agreement with India and said the world's second biggest economy was willing to give more market access to Indian products to bridge widening trade deficit.

[caption id="attachment_802853" align="alignleft" width="380"] Chinese Premier Li Keqiang arrives for a meeting with Indian President Pranab Mukherjee. AP.[/caption]

Addressing the Indian business community here, he emphasised on the need for enhanced bilateral trade and investments between the two nations. "We also understand India's concerns of trade deficit. China is also willing to provide facilitation to India's products to access Chinese markets. "I am confident that we have the ability to mitigate the trade imbalance between our two counties and China never has any intention to seek trade surplus and only a dynamic trade balance is a sustainable trade relations," Li said.

While India's export to China stood at only USD 13.52 billion in 2012-13, its imports from that country aggregated USD 54.3 billion, leaving a trade deficit of USD 40.78 billion during the last fiscal. Both the sides have aimed at taking the two-way trade to USD 100 billion by 2015. At different for a the government and the domestic industry have flagged concerns over the ballooning trade imbalance with China and has demanded greater market access for Indian products like pharmaceuticals, IT and agriculture.

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"We need to reduce trade imbalance. Our two-way trade is less than USD 70 billion and we need to enhance the dynamics of trade balance," Li said. Although Li expressed willingness to launch negotiations for a free trade agreement, Indian industry is wary of any such move due to the competitive disadvantage and high trade gap with the neighbouring country. "China is willing to launch negotiations on a China-India regional trading arrangement," the Chinese Premier said. On the issue, former Ficci President R V Kanoria said that before initiating any such talks with China, the government should address domestic problems like high transaction cost.

PTI