India plans trade deal to boost exports to China

The plan includes seeking duty waiver on a raft of products under APTA when talks come in 2019

By BLOOMBERG

NEW DELHI • India is devising a plan to boost shipments of around 200 products to China and narrow the deficit with its biggest trading partner, a person with knowledge of the matter said.

The plan includes seeking duty waiver on a raft of products under the Asia Pacific Trade Agreement (APTA), the person said, asking not to be identified as the talks are still on.

New Delhi wants China to scrap levies on items including uncombed single cotton apart from castor oil, menthol, granite, diamonds and glass envelopes for picture tubes when negotiations for expansion come up in April 2019.

An analysis by Prime Minister Narendra Modi’s administration shows that South-East Asian nations, Australia and South Korea among others have competitive advantage over India due to free trade agreements with China.

In marine products, especially frozen shrimps and prawns, India loses its competitive advantage due to tariffs, while shipments from Asean are allowed duty free.

APTA, established in 1975, seeks to create a liberal trading regime between Bangladesh, India, Laos, Korea and Sri Lanka and China. Apart from seeking tariff concessions, the ongoing US and China trade conflict also presents an opportunity to cut down the US$56 billion (RM232.96 billion) trade gap it runs with China, the person said.

But trade experts feel that it is not tariff concession alone that will help India, which lags many of its South-East Asian peers in competitiveness. Also, India shouldn’t lose focus on other trade pacts that are being negotiated including the Regional Comprehensive Economic Partnership in its bid to boost exports to China.