Trade with China is turning into a steep welfare loss for India. Already, the trade deficit – straight indicator to show the trade position of the country has registered $53bn deficit with China. Surprisingly, this is happening when the whole world trade is falling.
India’s huge trade deficit is more a result of the country’s inability to produce quality manufacturing. Government has launched several steps including the Make in India initiative. At the same time, China has not shown any interest to accommodate Indian imports so that the deficit may come down from the high unsustainable way.
Such an official position by Beijing is compelling the government to make some corrective measures. Amidst initiatives to promote domestic goods, several import curb measures within the WTO frame work is studied.
In one such development, New Delhi is adopting a less liberalized agenda in the coming Regional Comprehensive Economic Partnership (RCEP) discussions. A differential tariff concessions to the members is already proposed by India.
Trade Ministers of the 16-member RCEP (10-member ASEAN, India, China, Japan, South Korea, Australia and New Zealand) are scheduled to meet in Cebu, Philippines, on November 3-4 to design agreements in goods, services and investments.