Trade agreements between China and India have been a topic of discussion among economists and politicians alike. Both countries have been trying to increase their exports while reducing their imports, and a trade agreement could help them achieve this goal.
China and India are two of the largest economies in the world, and a trade agreement between them could have far-reaching implications. In recent years, there has been an increase in the trade between the two countries, which has led to a rise in tensions over issues such as border disputes, trade imbalance, and intellectual property rights.
The most recent development in this regard came in November 2020, when China and 14 other countries signed the Regional Comprehensive Economic Partnership (RCEP). India was part of the initial negotiations but eventually backed out of the deal, citing concerns about the potential influx of cheap goods from China.
However, this does not mean that a trade agreement between China and India is impossible. Both countries have a lot to gain from such an agreement. For China, India is a huge market for its goods and services. In 2019, China`s exports to India were worth $74.72 billion, making it China`s second-largest trading partner in Asia. A trade agreement could further boost China`s exports to India by removing barriers such as tariffs and non-tariff barriers.
For India, China is a significant supplier of goods such as machinery, electronics, and chemicals. In 2019, China was India`s largest trading partner, with bilateral trade reaching $92.6 billion. A trade agreement could help India reduce its dependence on China by diversifying its imports and finding new markets for its exports.
To make a trade agreement work, both countries will need to address their respective concerns. For China, India`s protectionist policies and non-tariff barriers have been a barrier to trade. India, on the other hand, has concerns about the influx of cheap goods from China and the impact on its domestic industry.
One way to address these concerns could be through a phased approach to trade liberalization. Both countries could start with a limited agreement that focuses on specific sectors such as agriculture or textiles. As trust and confidence build, the agreement could be expanded to cover more sectors and reduce barriers further.
Another approach could be to address non-tariff barriers such as intellectual property rights, technical standards, and regulations. By harmonizing these standards, both countries could reduce the costs of doing business and make it easier for companies to trade with each other.
In conclusion, a trade agreement between China and India could be a game-changer for both countries. It would provide them access to each other`s markets and help them diversify their trade relationships. However, it will require both countries to address their respective concerns and work together to find a mutually beneficial solution. With the right approach, a trade agreement could be a win-win for both China and India.