India China Trade Agreements
The India-China relationship is one of the most complex and dynamic in the world. Both the countries are emerging economic superpowers with a rapidly growing middle class. Despite their differences, the two countries have a lot to gain from trade agreements. In recent years, India and China have signed many trade agreements to boost their commercial ties. In this article, we will explore the India-China trade agreements and their impact.
Overview of India-China Trade Agreements:
India and China have signed several agreements to enhance bilateral trade. Some of the notable agreements are:
1. Free Trade Agreement Negotiations: In 2003, India and China started negotiations on the Free Trade Agreement. However, the negotiations have not been fruitful, and the agreement is yet to be signed.
2. Regional Comprehensive Economic Partnership (RCEP): RCEP is a proposed free trade agreement between 16 countries, including India and China. The agreement aims to reduce trade barriers and promote regional economic growth. However, India withdrew from the negotiations in 2019, citing concerns about its domestic industries.
3. Bilateral Investment Treaty (BIT): In 2014, India and China signed a BIT. The treaty aims to protect investments made by both countries in each other`s territories. The treaty is expected to increase investment flows between the two countries.
4. Agreement on Trade in Services: In 2005, India and China signed the Agreement on Trade in Services. The agreement aims to enhance cooperation in the services sector and promote the exchange of professionals in various fields.
Impact of India-China Trade Agreements:
India and China have a lot to gain from trade agreements. The agreements can lead to increased trade and investment flows, which can boost economic growth and create employment opportunities. However, there are also some concerns.
1. Trade Imbalance: India`s trade deficit with China is a major concern. In 2019-20, India`s exports to China were $16.6 billion, while imports were $65.2 billion. This trade imbalance can have a negative impact on India`s economy.
2. Dumping of Chinese Goods: There are concerns that China is dumping cheap goods in the Indian market, which is affecting domestic industries. This can lead to job losses and a decline in the competitiveness of Indian industries.
3. Border Tensions: Border tensions between India and China can have an adverse impact on trade agreements. The recent standoff between the two countries has led to a boycott of Chinese goods in India. This can lead to a decline in imports from China.
India and China have signed several trade agreements to enhance their commercial ties. The agreements can lead to increased trade and investment flows, which can boost economic growth. However, there are also concerns, such as trade imbalances, dumping of Chinese goods, and border tensions. A balanced approach is required to ensure that the trade agreements benefit both countries.