India and China are making joint efforts to boost bilateral trade of farm products from tobacco to rapeseed meal, in a bid to effectively narrow the trade gap between the two Asian economies.
In fact, China’s agricultural trade with the US has been significantly impacted by the China-US trade war, which is also bringing China and India closer to each other in agricultural trade, for example, offering India a great opportunity to export more farm products such as soybeans to China.
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The two countries signed a protocol on Indian tobacco exports to China, the world’s largest consumer and producer of the tobacco, on January 21 and 22 when India’s Commerce Secretary Anup Wadhawan paid a two-day visit to Beijing, according to a statement released by the Indian Embassy in China.
The protocol was signed by Zhang Jiwen, Vice Minister of General Administration of China Customs (GACC), and Wadhawan, who commended the GACC for addressing some “long-pending” market entry issues for Indian agricultural products, following consensus reached on these matters at an informal summit between China’s and India’s top leaders last year.
Since that summit, GACC has approved rapeseed meal from six Indian mills to enter Chinese market. The protocol on exports of fish meal and fish oil to China was also signed during Zhang’s visit to India in November 2018, the embassy said.
“Agricultural cooperation is a great opportunity to improve the current China-India trade situation, as India is a vast agricultural country and most of its farming products are non-genetically modified organisms,” said Zhao Gancheng, a senior official with the Shanghai Institute for International Studies.
India is the world’s leading dairy producer and milk consumer, but Indian people don’t eat bovine meat, so China could import the meat and more dairy products from India, as a way to cut India’s trade deficits with China, trade analysts said.
Last year, China imported $18.84 billion worth of goods from India, while its exports to the latter totaled $76.7 billion during the period, resulting in a trade surplus of nearly $58 billion, according to data from GACC. Overall, trade volume between the two economies jumped by 13.2 percent year-on-year in 2018.
Experts have also warned that it’s too early to say India’s trade relations with China will improve stably and in the long term, as diplomatic relations between the two sides haven’t been so smooth in recent years.
“The Indian government still watches out for China in many ways. For example, India still restricts some Chinese companies’ investment in India, and that’s why China’s investment in India is quite limited,” Zhao said, adding that the two countries should connect closer and communicate more at present.
Currently, it will be a better and practical choice for both India and China to make some compromises for further cooperation.