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Journalism of Courage
Ahead of Prime Minister Narendra Modi’s visit to China, India Inc on Tuesday urged the government to take up the issues facing industry in the neighbouring nation, especially in pharma, IT and media and entertainment.
“Sectors such as IT, drugs and pharma, and media and entertainment pose several challenges for Indian firms. To contain the rising trade deficit between India and China, we have suggested urgent measures to reduce non-tariff barriers in these sectors,” said Chandrajit Banerjee, director general, CII.
Raising several market access issues Indian industry faces in China, the CII in its report — Accelerating Indo-China Economic Engagement — said that a four-pronged strategy should be adopted to deal with the Asian giant. This would include leveraging India’s importance as a market for Chinese products; push for market access in key sectors, prioritising Chinese FDI in 18 identified sectors and establishing a sovereign deal to attract investment in infrastructure; and setting up an institutional committee to monitor the achievement of goals.
The Prime Minister will be visiting China from May 14-16 during which he will travel to Beijing, Shanghai and Xian and meet Chinese President Xi Jinping and Premier Li Keqiang. Among other issues, he is likely to push for greater market access for Indian exports to China.
India’s trade deficit with China stood at $44 billion in the April-February FY15 period. Imports from China rose 18.18 per cent to $55.77 billion and exports fell 18.88 per cent to $11.01 billion during the period.
As such, the foreign trade policy 2015-2020 has warned that if the current situation persists, by 2016-17, merchandise imports from China will exceed $80 billion while India’s exports will be around $20 billion leaving “an unsustainable trade deficit of $60 billion.”
According to the CII memorandum submitted to the government, problems faced by India Inc include inability to meet qualifying norms and certifications needed to bid for government projects and insistence on local entities in some provinces to avail of subsidies thus reducing competitiveness.
