Non-Tariff Barriers Biggest Hurdle in India-China Trade: FM Sitharaman
Finance Minister Nirmala Sitharaman identifies non-tariff barriers as the biggest hurdle in India-China trade and highlights the growing imbalance.
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman has identified India China trade barriers—specifically non-tariff ones—as the primary obstacle hindering economic relations between the two neighbors. Speaking during an interactive session with Michael Kugelman of the Atlantic Council on ‘India’s economic edge’ in Bangkok, the Finance Minister highlighted a persistent and growing trade imbalance that continues to weigh heavily on India.
The Struggle for Market Access
While discussing the friction with Beijing on the sidelines of the World Bank-IMF Annual Meetings, Sitharaman pointed out that India has been consistently seeking better market access for years, but to little avail. She emphasized that the trade deficit is not only significant but is growing exponentially.
The Finance Minister noted that India possesses global leadership in several sectors where there is immense potential for growth within the Chinese market. These include:
- Generic drugs
- Bovine meat
- Vegetables and perishables
Despite the competitiveness of these products, Sitharaman stated that Indian exports face persistent roadblocks. She accused China of using non-tariff barriers "unhesitatingly," often citing phytosanitary measures or other technicalities to block Indian goods. According to the Minister, while these issues could be resolved through due investigations and bilateral talks, no real progress has been made over the last decade.
India's Diplomatic Approach vs. Global Trends
A key point of the Minister's discussion was the difference in how India handles trade imbalances compared to other global powers. She observed that many countries today adopt a punitive approach, imposing heavy tariffs when trade imbalances become unsustainable.
"That approach we have never taken," Sitharaman remarked, explaining that India prefers a path of dialogue over retaliation.
She admitted that the process of sitting and talking is often "tiresome," but maintained that India avoids using countervailing duties (CVDs) or creating its own non-tariff barriers just to counter those imposed by China. This commitment to negotiation, however, makes it difficult to correct the prevailing imbalance.
Looking Beyond China: India-US and Global Ties
Shifting the focus to other strategic partnerships, the Finance Minister touched upon the highly anticipated trade agreement between India and the United States. Referencing recent statements by the Indian Commerce Minister, she expressed hope that the agreement would be concluded soon in the interest of both partners and global trade.
Furthermore, Sitharaman reiterated India's dedication to multilateralism. She highlighted that while India is pursuing a pact with the US, it is also actively working on direct trade agreements with several other key partners, including:
- The United Arab Emirates (UAE)
- Australia
- Canada
- The European Free Trade Association (EFTA) bloc