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India, China move to resolve disputes, increase trade
Published on 13 Apr. 2011 10:58 PM IST
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India and China Wednesday agreed to restore stalled high-level defence exchanges, increase visits by political leaders and reduce their trade imbalance in steps towards improving ties that have remained frosty in the past.
The decisions, which also include setting up a consultation mechanism for border disputes between the two Asian giants who fought a war in 1962, were taken at a meeting between Indian Prime Minister Manmohan Singh and Chinese President Hu Jintao, National Security Advisor Shivshankar Menon said.
Menon told reporters after the 50-minute meeting in this Chinese coastal resort that “it has been agreed that a multi-command Indian Army delegation will be visiting China later this year. We are also discussing further exchanges and visits in this sector during the year”.
India suspended defence exchanges last year in August, strongly objecting to China issuing a visa on a loose sheet to Lt. Gen. B.S. Jaiswal of the army’s Northern Command based in Jammu and Kashmir.
This was in continuance of China’s 2008 policy to issue stapled visas to Kashmiris, indicating that it sees the state as disputed territory and its residents as non-Indians.
Menon denied there was a blanket ban on defence ties. “We never froze defence exchanges. We have always continued defence exchanges. For instance, meetings of our commanders, flag meetings or the border commanders’ meeting, all that has gone up.”
Asked about stapled visas, Menon said the Chinese “are working to resolve this”.
He said the India and China were poised to enhance bilateral commerce to $100 billion by 2015, but concerns remain on trade imbalance in favour of Beijing.
To reduce the deficit, Manmohan Singh asked for more market access to Indian goods during his “very productive warm, friendly meeting” with Hu, said Menon.
Menon, who was part of the Indian team in the talks, said the prime minister did mention about the trade imbalance that rose to $20 billion in the overall bilateral commerce of nearly $60 billion in 2010. In 2009, this was about $16 billion.
He added that China had agreed to increase imports from India.
“Manmohan Singh mentioned pharma, IT and agriculture as areas which would conceivably help to reduce the imbalance, if there was more access. It was not disputed (by the Chinese side). In fact, President Hu said this was an issue that concerns them and they look forward to finding solution.”
Menon, however, was of the view that recent two-way trade figures of the two countries had shown a trend favourable for India. “In the first few months of this year Indian exports to China have grown much faster than Indian imports from China.”
The two sides also agreed in principle to establishing a “working mechanism for consultation and coordination on border affairs”, Menon said.
“This will handle important border affairs relating to maintaining peace and tranquility,” Menon said, maintaining that India-China boundary “is one of the most peaceful borders that we have”.
Elaborating on the mechanism, Menon said it would “explore cooperation in the border areas, and implement the agreements (signed in 1993 and 1996) that we already have in place to maintain peace”. Manmohan Singh and Hu also accepted each others’ invitation to visit their countries. The dates will be decided later.
The two sides “formally launched the year of India-China exchange in 2011 where there will be a series of exchanges. This will include visits by senior political leaders, the holding of the strategic economic dialogue, which we hope to do as soon as possible, bilateral official consultations, and people-to-people contacts”, said Menon.
Commerce and Industry Minister Anand Sharma, Menon and Indian ambassador to China S. Jaishankar were part of the Indian team that met President Hu at Sheraton Beach Resort on the sidelines of the 3rd BRICS (Brazil, Russia, India, China and South Africa) summit.

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