India and China : Trade- Areas of concern

India’s imports from China decelerating: Report

News Context:

  • Recently PHD chamber of Commerce has reported that there has been deceleration of demand for China’s products in India, during the April-January period of 2018-19 financial years.

Indo- China Trade

  • China is India’s 3rd largest export destination and largest sources of imports to India.
  • There was a tremendous jump in total trade between the two countries from USD 3 billion in 2001-02 to around USD 90 billion in 2017-18.
  • However, the trend has seen a reversal in the April-Jan 2018-19.

Important facts from the report :Trade between India and China during the April- January 2018 to April- January 2019

  • India’s exports to China grew by 31% (from USD 10 billion to USD 14 billion).
  • India’s import growth from China shrunk from 24% during to (-) 5% .
  • India’s trade deficit with China has also eased from USD 53 billion in April-January 2018 to USD 46 billion in April-January 2019.
  • India’s import items from China (majorly)
    • Electrical equipments
    • Mechanical appliances
    • Organic Chemicals
  • India’s export items to China comprise (Majorly)
    • Organic chemicals
    • Mineral fuels
    • Cotton

Areas of concerns:

  • India is one of the biggest manufacturers of generic pharma products. However, we are unable to export to China because of China’s stringent non-tariff barriers, which needs to  be mitigated.
  • Despite being neighboring countries, India and China witness high trade cost because of extra barriers imposed on agricultural and processed products, which needs to be mitigated to boost the agri-products trade and reduce the ever rising trade costs.

Way ahead

  • In recent years, there has been a shift in taste and preferences for products made in China as well as growing and competitive Indian production capabilities and shift in the consumption patterns of Indian consumers, which is sought to be in favour of India.
  • Although the mounted trade deficit with China is substantial, given the recent trends and amendments in the Foreign Trade Policy 2015-20, the volume of trade deficit is expected to ease in the coming years.
Section : Economics

Every about Sino- India Border Dispute

China destroys maps showing ‘wrong’ border

The news

  • Chinese Customs officials have destroyed 30,000 world maps printed in the country for not mentioning Arunachal Pradesh and Taiwan as part of its territory.

Background

  • China claims the north-eastern Indian state of Arunachal Pradesh as part of South Tibet and persistently objects to Indian leaders visiting Arunachal Pradesh.
  • However, India maintains that the State of Arunachal Pradesh is integral and inalienable part of the country and the leaders frequently visit the state.
  • The two countries have so far held 21 rounds of talks to resolve the border dispute covering 3,488-km-long Line of Actual Control (LAC) in Arunachal Pradesh but with no conclusions.

 

News Summary

  • According to a report in Global Times, a Chinese media house, customs officials in China have destroyed 30,000 world maps, which were printed by China for export to an unspecified country.
  • The 30,000 World maps were “incorrect” according to the officials as they were showing Taiwan as a separate country and had wrong depiction of the Sino-Indian border.
  • They destroyed the maps as it didn’t mention Arunachal Pradesh and Taiwan as part of China’s territory.
  • They consider this step as legitimate and necessary to maintain their sovereignty and territorial integrity, considering both Taiwan and South Tibet as integral parts of Chinese territory.

 

About India China border Dispute

  • The entire disputed Sino-Indian border is depicted below.
  • The border stretches from the Aksai Chin plateau in the west (administered by China but claimed by India), through Sikkim in the middle, and across to the eastern Indian state of Arunachal Pradesh (administered by India but claimed by China as ‘South Tibet’).

  • The dispute originatedin 1914, at the Anglo-Tibetan Simla Conference, where the British colonial authorities drew the McMahon Line, which established the boundary between British India and Tibet.
  • Although Chinese representatives were present at Simla, but they refused to sign or recognise the simlaconvention ‘on the basis that Tibet was under Chinese jurisdiction and therefore did not have the power to conclude treaties’.
  • After independence in 1947, India made the McMahon Line its official border with Tibet.
  • Later, following the 1950 Chinese invasion of Tibet, India and China came to share a border with each other, which was demarcated by the McMohan line drawn by the same Simlaconvention.
  • China viewed this McMahon Line as an illegal, colonial and customary borderline.
  • After a brief period of soured relationship between India can China, armed conflict erupted between the two nations in 1962.
  • During the conflict, Chinese forces advanced deep into Indian Territory in Ladakh and Arunachal Pradesh, before withdrawing back to their previous positions.
  • Since then, China maintains that the McMahon Line effectively sees India occupying some 90,000 square kilometres of its territory in the Indian state of Arunachal Pradesh whereas India says the State of Arunachal Pradesh is its integral and inalienable part.
  • On the other hand, India claims that China is ‘occupying 38,000 square kilometres of land in Aksai Chin in the North Eastern corner of Jammu and Kashmir’ and a further ‘5180 square kilometres of land in Kashmir ceded to it by Pakistan in 1963’.
  • Since then, both the countries are trying to resolve this dispute but despite over 30 years of regular dialogues, Sino-Indian border issues remain complicated and difficult.

 

About Arunachal Pradesh

  • Arunachal Pradesh is a state of India created on 20 January 1972, located in the far northeast.
  • It borders the states of Assam and Nagaland to the south, and shares international borders with Burma in the east, Bhutan in the west, and the China in the north.
  • The majority of the territory is claimed by China as part of South Tibet.
  • The northern border of Arunachal Pradesh reflects the McMahon Line, a 1914 treaty between the United Kingdom and the Tibetan government which was never accepted by the Chinese government.
  • The treaty is also considered invalid by Tibetans due to unmet condition specified in the treaty, and not broadly enforced by the Indian government until 1950.
  • This territory is administered by India.

 

Section : International Relation