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'Make in India' and trade deals with China

‘Make in India’ and trade deals with China
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‘Make in India’ and trade deals with China

Highlights

At the outset, relationship with China has never been smooth at any given time due to big brotherly attitude adopted by China while dealing with India and border skirmishes occurring frequently leading to face-off and war-like situation every time

At the outset, relationship with China has never been smooth at any given time due to big brotherly attitude adopted by China while dealing with India and border skirmishes occurring frequently leading to face-off and war-like situation every time. Though every time, it ended in a truce beset with tension and uncertainties, there was no concrete and permanent solution with the result trade between the two nations took a nosedive. Knowing that the attitude of China has always been aggressive displaying no change as far as relations with India was concerned with the result economy suffered.

While the border clashes pushed the relations between China and India to a new low, India's dependence for imports of heavy machinery and other items from the west at a higher cost when it could be sourced from China at a lesser cost not only hampered trade activities but slowly led to a slump in economic growth. This caused a serious concern to look on for an alternative course to revive the economy after the pandemic inflicted a serious blow. The world including India blaming china and holding responsible for the spread of the virus, relations with china soured.

As if this is not enough, China rubbing salt on the wounds by allowing its troops to intrude into Indian borders on the Pangong lake frontier only made matters worse as relations soured further. While the wrong-doings by china saw India ban goods of Chinese make into India, unfortunately trade deficit widened. However, realising the mistake that thaw in relationship and not rising tension is the best option to resolve the outstanding issues plaguing the two nations, china and India deciding to have talks to end the stalemate in order to resume trade like earlier was a positive move in the present circumstances. This thus makes it clear that both cannot ignore trade activities for too long.

Hailing the diplomatic initiative taken to diffuse tension and narrow down the differences for resumption of trade, the two Asian giants affirmed that both nations cannot afford to do away with other by exhibiting cold war hostility. In short, India been the largest trading partner with two-way trade touching nearly $80 billion last year, the latest talks between the nations ending in china agreeing to withdraw troops from Pangong border is in fact a win-win situation for both. Because, as a sequel, India opening up trade and investment by easing investment restrictions for Chinese companies in India with a rider that the FDI by Chinese firms will be vetted in certain vital areas like telecom and defence before its approval is a step in the right direction. Now that business with China is expected to limp back to normalcy, India need to relax ban of Chinese-origin apps while at the same time encourage indigenous manufacturers so that we achieve self-reliance sooner.

K R Srinivasan, Secunderabad

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