New Delhi: Vice Minister for Commerce Chen Jian, Goverment of China today agreed to facilitate ASSOCHAM SME exhibitions in its various provinces and identify a nodal officer in China Council for the Promotion of International Trade (CCPIT) to provide a mechanism.
This was agreed at a meeting with ASSOCHAM today, Chen Jian and D S Rawat, Secretary General ASSOCHAM also released ASSOCHAM study on “Doing Business in China” here today.
Rawat said, India can advance its key strategic interest with China using, as a powerful handle, the USD 54 billion market that it has thrown wide open for the Chinese products annually and the message should go to the visiting Premier Li Keqiang by Indian leadership.
Jian further said, China is keen to help Indian exporters to market their products in their country and has invited ASSOCHAM business delegation in July/ August to finalize the strategy along with the China Council for the Promotion of International Trade (CCPIT).
“China has emerged as the largest supplier of merchandise goods to India, overtaking even the oil exporting countries. China claimed a tidy 20 per cent share in India’s total non-oil, non-gold imports of USD 268 billion in the financial year 2012-13 to the much of detriment of India’s domestic industry, mainly the small and medium enterprises”, added Rawat.
“That should make Chinese leadership realise that India is of strategic importance to it from the point of view of market which is only to grow by leaps and bounds given our consumption pattern based on a young population”, said its Secretary General.
Keqiang is visiting New Delhi and Mumbai from May 19 and the message should go out that the kind of products India imports from China are not the ones which can stall the Indian economy and can be sourced from elsewhere as well, adds Rawat.
“We are not importing crude oil from China without which our economy cannot survive…Bulk of our imports from China relate to electronics, electricals and machinery which can be sourced from rest of the world as well,” he said adding any invoking of WTO rules can successfully be thwarted in Geneva by India’s capable trade diplomats and legal brains.
ASSOCHAM said that it is not suggesting as if we should not trade with China. “Our trade engagement should increase further, instead so that any other strategic advancement sought to be gained by China should be at a heavy economic cost”.
Besides, once the economic engagement gets further deep-rooted, it would certainly lead to resolution of other strategic and political issues.
Using the same analogy, India should also advance its economic interest with Japan which should make China compete with its jealous neighbour to seek more market interests in India.
“While the business chambers should leave the strategic interest to the government, we are only underscoring the kind of market clout that India has gained over the years, which can be leveraged effectively in advancing the country’s strategic interests,”, said Rawat.
He said, India should use the same approach while dealing with its economic interests with the US where the senators are pressing for an Immigration law which will throttle India’s prowess in the information technology and at stakes are lakhs of jobs generated in the campuses of Infosys, TCS and Wipro.
When it comes to China, the ASSOCHAM is not suggesting that India should strain its ties with China. “it is in the best interest of the two neighbourly countries that their relations improve and are cemented through expanding commercial engagement”.
The chamber said, against its mammoth imports of USD 54 billion from China alone, India’s exports of merchandise goods were far short at USD 13 billion giving the Chinese a trade advantage of over USD 40 billion.
The trend in the financial year of 2012-13 has more or less followed that of the previous fiscal.
“At a time when Chinese economy, like most other economies of the world, is slowing, its exports to India would be of vital interest to the Chinese dispensation”, said Rawat.
Electronics, machinery, precious pearls and other commodities are the principal items of import from China. When it comes to exports, main items which are shipped to China are petroleum products, transport equipment, machinery and drugs and pharmaceuticals.
A large trade imbalance has been a matter of concern and should again be raised at the highest level with the Chinese leadership. The Indian exports of several items, especially drugs and pharmaceuticals face trade barriers in China.
A large-scale dumping of Chinese goods has hurt interest of the Indian businessmen and manufacturers in their own markets. Most of the damage has been done to the small and medium enterprises which find it difficult to compete with the economies of scale from aggressive exporters. Be it toys, worship idols, lightings, tubes, the Chinese goods are all there.
In the recent past, the Chinese commercial aggression has not limited itself to small and medium scale items, but to heavy engineering. The home-grown PSU and private firms such as BHEL and L and T have suffered a lot at the hands of Chinese power equipment manufacturers. The story is somewhat similar in the telecom gear.