In an annual review, Ministry of Commerce and Industry has decided to open its first ever Trade Promotion Centre in Beijing to promote export to China. Besides, the trade conflict nudged the country to formulate the first ever agricultural export policy.

Amidst the global trade turmoil due to US tariff war against China, both India and China inched closer for joint efforts to increase exports to China, which needs India to offset the loss in imports of its essentials from US due to retaliatory measures and India hailed the action as an opportunity to counter-balance the huge trade deficit. China accounts for more than one-third of India’s global trade deficit.

Given the protracted inimical political relation triggered by the Doklam stand-off and India’s refusal to be party to Chinese BRI (Belt and Road Initiative), supplemented by growing trade imbalances, the relation between India and China was tending towards bitterness. Against this, in a surprise move, the trade war led China into a volte-face by unleashing a fresh look for a good neighborhood economic partnership with India. Gao Feng, the spokesman of Ministry of Commerce, China, said “As two large developing countries and major emerging market economies, China and India both have huge domestic market”. He said further, “the economies of both countries are highly complementary to each other, creating enormous potential for cooperation”

To this end, the post effect of US-China trade war can be reckoned as the first ever realistic attempt to dilute the intransigent stand of both countries and sway the trust deficit for betterment of relation between the two countries. Chinese media mellowed its ire against India and instead, highlighted factors for betterment of the relations. Global Times, the official English media of China – cited three advantages, which both nations share. First is the large and low-cost labour force. Second, it is large domestic market and third a great supply of high quality human capital, which refers to Indian IT services and science and engineering talents.

Trade war opened a new gate for India to exercise a stake in the global export market for agricultural products. The Ministry of Commerce and Industry formulated India’s first ever Agricultural Export Policy, with a focus to boost India’s agriculture exports of US $60 billion by 2022. The Ministry is making all efforts to diversify India’s export basket region-wise and commodity-wise.

India held three inter-ministerial meetings with Ministry of Commerce, China (MOFCOM) for exports post–trade war. General Administration of Custom, China approved 24 Indian rice mills for exporting non-basmati rice and 5 rapeseed mills for export of rapeseed meal. In 2012, China had suspended import of rapeseed meal from India.

The volte face of China did not limit to Chinese government. It extended to entrepreneurs. Hong Kong-based billionaire and Chairman of Li & Funf group of companies was hopeful that China would look to India for a big investment, where products can be finished and exported to US in the wake of high tariff on imports from China. He asserted that US–China trade truce is a short term phenomenon. He was further assertive that Vietnam and Bangladesh could not act as replacement and reposed high hope on India for finish goods production, which has having infinite capacity. He reiterated the trade war would pave the way to correct the trade imbalances between China and India.

Alongside, a momentum is growing for Chinese support for development of infrastructure in the country. Three big Chinese companies have decided to invest nearly US$15 billion in Indian infrastructure.

Cross-border e-commerce would be another potential area for joint cooperation between the two countries. India has become the fastest market in e-commerce, with about 100 million internet connections adding every year. According to a report by Tracxn, a start-up research company in India, a whopping US $5.2 billion was invested by Chinese internet companies in 2017, like Alibaba, Fosun, Baidu and Tencent. This showed a five-fold jump from US $930 million investment in India in 2016. (IPA Service)