Govt signs 5-year economic cooperation pact with China to better trade ties

Prime Minister Narendra Modi and Chinese President Xi Jinping exchanged 12 documents on Thursday following talks between the two leaders.

The government also signed a 5-year trade and economic cooperation agreement with China with a view to improve the trade balance and obtain US $20 billion Chinese investment into the country.

The 'Five year Trade and Economic Development Plan' was signed by Indian Commerce Minister Nirmala Sitharaman and her Chinese counterpart Gao Hucheng in the presence of Prime Minister Narendra Modi and Chinese President Xi Jinping, who is on a three-day visit to the country.

The agreement lays down a medium term roadmap for promoting balanced and sustainable development of economic and trade relations between China and India, on the principle of equality and mutual benefit.

Among other things, it seeks to reduce the bilateral trade imbalance between the two countries and strengthen investment cooperation to realise US $20 billion investment from China in 5 years.

Also a transparent, stable and investor friendly business environment and an enhanced cooperation between Chambers of Commerce and financial sectors of the two countries would also be covered under the pact.

The trade gap between the two countries stood at US $35 billion in favour of China. The total bilateral trade stood at US $66.4 billion in 2013.

The first of the 12 agreement was on a new route to Kailash Mansarovar, while two pacts were on trade development. There were also agreements on audio video co-production, on cooperation in railways and on exchanges between cultural institutions.

Sitharaman and Gao also signed the minutes of the tenth session of India-China Joint Economic Group held earlier this month in Beijing.

Both sides, during the Beijing meeting, held detailed discussions on various issues to promote broad and deep bilateral trade and economic cooperation and agreed to undertake measures to achieve sustainable and balanced trade.

Specific measures to enhance market access to Indian products such as agricultural and pharmaceutical, and export of services were also discussed during that meeting.