India and China on Saturday agreed to set up a high-level economic and trade dialogue mechanism to go into trade, investment and services.
The mechanism would include Finance Minister Nirmala Sitharaman and Chinas Vice-Premier Hu Chunhua. This was one of the outcomes of the two-day second India-China informal summit between Prime Minister Narendra Modi and Chinas President Xi Jinping that concluded in Kovalam, about 30 km from Chennai.
The development assumed importance in the light of India expressing concerns repeatedly over its trade deficit of about $50 billion with China in the bilateral trade Trade deficit is not economically sustainable and it is also something that is sensitive to the domestic industry [of India], Foreign Secretary Vijay Gokhale said.
Asked what visible progress the bilateral ties had witnessed since the Wuhan summit of April 2018, the Secretary replied that there had been greater recognition by China of economic and trade level matters [that concerned India]. The Chinese President, during the deliberations, had agreed to have the issue of trade deficit addressed, which was a visible progress.
The two leaders also agreed that the possibility of forming a manufacturing partnership should be explored through the proposed mechanism.
Mr. Modi suggested that both sides identify specific industries or sectors where investment could come in and manufacturing would help create employment, jobs and enhance the market for both sides.
To a query, the Secretary replied that the new mechanism would discuss the relaxation of visas for information technology (IT) professionals.
As for India signing the Regional Comprehensive Economic Partnership (RCEP) agreement covering the 10-member ASEAN bloc (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) and its trading partners China, Japan, South Korea, Australia, and New Zealand, the Secretary said Mr. Modi had stressed the importance that the RCEP should be balanced. Besides, balance should be maintained between trade and goods, services and investment. China was of the view that Indias concerns should be considered.
A release issued by the Ministry of External Affairs said the two sides had agreed that it is important to support and strengthen the rules-based multilateral trading system at a time when globally agreed trade practices and norms are being selectively questioned. India and China will continue to work together for open and inclusive trade arrangements that will benefit all countries.
J&K issue not discussed: official
Regarding questions on reports of China supporting Pakistan on the Jammu and Kashmir row, Mr. Gokhale clarified that the J&K issue was neither raised nor discussed. He added that the relationship between the two countries was not predicated on a single issue. It ranged from historical problems to cooperation at the international and regional spheres.
The release said Mr. Modi and Mr. Xi urged the special representatives of the two countries to continue their efforts to arrive at a mutually-agreed framework for a fair, reasonable and mutually acceptable settlement [of outstanding issues including on the boundary question] based on Political Parameters and Guiding Principles that were agreed by the two sides in 2005.
The Secretary added that Mr. Xi was keen on strengthening the collaboration between the two countries in defence. An invitation had been extended to Defence Minister Rajnath Singh to visit China.