‘India, China open to talks to address trade imbalance, supply chain issues’

India and China are open to meeting and finding solutions to long-standing trade issues, including structural trade imbalances and supply chain concerns, Commerce Secretary Rajesh Agrawal said on Tuesday, signalling a tentative effort to rebuild economic engagement between the two countries.

The comments came after India and China held their first trade discussions in a long time, amid border tensions, with Commerce and Industry Minister Piyush Goyal and his Chinese counterpart Wang Wentao meeting on the sidelines of the BRICS Summit in New Delhi last weekend to discuss trade concerns.

“We are open to meeting and finding solutions to our trade issues in a manner so that we can address supply chain issues, we can address structural trade imbalances, and we can make trade easier for our businesses,” Agrawal said, answering questions at a media briefing.

The Commerce Secretary said the latest engagement was an “initial first meeting” and that the two sides would meet subsequently to take the discussions forward. “Slowly, I think each side will need to come up with their issues and also their position on issues of the other side's issues, so that we can deal with this problem,” he said.

The discussions were taking place against the backdrop of gradual confidence-building between the two countries over the past year, Agrawal said, citing improvements in people-to-people movement, connectivity and flight operations.

“This is a work in progress,” he said, adding that both sides had begun to engage in trade in a very positive manner. India runs a persistent trade deficit with China, driven by high imports of electronics, engineering goods, chemicals and other intermediate and finished products.

India has long sought greater access for its goods in the Chinese market, measures to address non-tariff barriers, and an unimpeded flow of inputs such as rare-earth materials and technology, while Beijing has sought easier access for Chinese investments and businesses.

The economic engagement comes after the two sides made efforts over the past year to stabilise broader bilateral ties following years of tensions along the Line of Actual Control. Peace at the border is essential to advancing bilateral ties, Prime Minister Narendra Modi said in his bilateral meeting with Chinese President Xi Jinping on the BRICS sidelines last weekend.