Agreement facilitating recognition of India’s plant protection measures by China on the cards.
When Prime Minister Narendra Modi visits China, he is likely to achieve a rare feat — entering into an in-principle deal with the neighbouring country to mutually recognise each other’s’ standards on agro-products, thereby unlocking New Delhi’s export potential to Beijing.
Sources told The Indian Express that China’s Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) will sign an agreement with India’s agriculture department that will facilitate the recognition of the country’s plant protection measures in the neighbouring nation.
According to estimates, the sources said, once operational the development would pave way for export of bovine meat worth $1billion in the first two years itself, around $500 million worth various fruits and non-basmati rice worth $500 million, all of which is currently stuck due to restrictions placed by the AQSIQ, the ministerial-level administration that is in charge of national quality, entry-exit commodity inspection, entry-exit health quarantine, entry-exit animal and plant quarantine, certification and accreditation among other functions.
“The two sides have decided to work on an MRA for agro-products. This will provide a platform to India to at least put forth its concerns on decisions taken by the AQSIQ. The two sides are working on the procedures including the timeline for addressing issues, the schedule of the AQSIQ inspectors to visit facilities in India and procedure for recognising the country’s plant protection measures and organisation,” the sources said.
The Prime Minister will embark on a three-day visit to China from May 14-16 during which he will travel to Beijing, Shanghai and Xian and meet Chinese President Xi Jinping and Premier Li Keqiang. Among other issues, he is likely to strongly push for greater market access for Indian exports to China.
India has been in talks with China to provide market access to its bovine meat and in 2013 the two countries had signed a memorandum of understanding to facilitate the same.
However, despite the hopes offered by Chinese agencies, real market access has not yet materialised.
In August last year, commerce and industry minister Nirmala Sitharaman had told the Rajya Sabha that Indian bovine meat and meat products have been denied entry into the Chinese market on grounds of alleged foot and mouth disease in India.
China accounts for over a quarter of India’s trade deficit with restricted market access and non-tariff barriers (NTBs) blocking India’s exports of pharmaceuticals, agro commodities, IT and ITeS services. India’s trade deficit with China stood at $44 billion in the April-February 2014-15 period with imports from China increasing 18.18 per cent to $55.77 billion and exports declining 18.88 per cent to $11.01 billion.
The foreign trade policy 2015-2020 has warned that if the current situation persists, by 2016-17, merchandise imports from China will exceed $80 billion while India’s exports will be around $20 billion leaving “an unsustainable trade deficit of $60 billion.”
In this context, the MRA will help India deal with the trade deficit situation to some extent even as it continues to pursue market access and removal of NTBs to augment exports of pharmaceuticals, agro commodities, including bovine meat, oil meals and cake, tobacco, rice, and fruits and vegetables. New Delhi is also working on promoting high value exports of products with a strong domestic manufacturing base, including engineering goods and electronics.
Curbing trade imbalance
* “The two sides have decided to work on an MRA for agro-products. This will provide a platform to India to at least put forth its concerns on decisions taken by the AQSIQ. The two sides are working on the procedures including the timeline for addressing issues, the schedule of the AQSIQ inspectors to visit facilities in India and procedure for recognising the country’s plant protection measures and organisation,” the sources said.
* India’s trade deficit with China stood at $44 billion in the April-February 2014-15 period with imports from China increasing 18.18 per cent to $55.77 billion and exports declining 18.88 per cent to $11.01 billion.