ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter

Indian foreign minister urges China to open IT, medical markets

Jaishankar cautious on RCEP trade deal in interview with Nikkei

Subrahmanyam Jaishankar, India's foreign minister, voiced concerns over India's growing trade deficit in the Asia-Pacific region.(Photo by Karina Noka)

TOKYO -- India's top diplomat has complained of the very small presence of Indian products competing in the Chinese market, indicating India's intention to call on China to open up to more Indian imports.

"We believe that there are many sectors where we are competitive in the rest of the world, but we have not been able to get a market share in China," Subrahmanyam Jaishankar, the minister of external affairs, said in a recent interview with Nikkei. His remarks apparently echoed New Delhi's discontent with the fact that Indian information technology equipment and other competitive exports have failed to gain significant market shares in China.

Jaishankar also expressed caution toward India's participation in the Regional Comprehensive Economic Partnership (RCEP), a proposed free trade agreement in the Asia-Pacific region. "We have a very large trade deficit with RCEP countries. In 2005 I think our trade deficit with RCEP countries was $7 billion. Today it is $105 billion," he said.

Jaishankar visited Japan to attend a meeting of the Group of 20 major countries' foreign ministers, held on Nov. 22-23 in Nagoya, and spoke with Nikkei to discuss trade and diplomatic issues.

China accounted for about 30% of India's overall trade deficit in 2018, which amounted to $189.4 billion. Jaishankar contended that high tariffs and other trade barriers have denied competitive Indian exports, such as medical and IT products, fair access to the Chinese market. "One would be in pharmaceuticals. We have very big pharmaceutical exports for many other countries in the world. But we are not able to get into the Chinese market. The other would be the IT industry... We have growing IT exports to Japan, but we have not again been successful in getting into the Chinese market," he said.

In October, Indian Prime Minister Narendra Modi agreed with Chinese President Xi Jinping to expand trade and investment between the two countries and set up a new framework for bilateral minister-level talks over related issues.

"We are always hopeful that we will find make progress," Jaishankar said, and suggested that India will try to capitalize on the talks to seek greater access to the Chinese market for a wide range of Indian products.

It has been believed that India is keen to protect its domestic industries from a possible influx of cheap Chinese imports that could flood the Indian market if a free trade deal involving both countries is reached. But Jaishankar's comments seem to suggest that India is growing more interested in expanding its exports to China.

The Indian official also expressed a dim view of the China-Pakistan Economic Corridor (CPEC) infrastructure initiative, under which the Chinese and Pakistani governments are working together to build power plants, roads and other infrastructure facilities in Pakistan. "The so-called corridor goes through a territory that belongs to India. So, we object to that because it is a violation of our sovereignty. So, that is a significant concern," he said.

But Jaishankar stopped short of criticizing China's "One Belt, One Road" project, designed to expand and improve connectivity and cooperation among countries across the continents of Asia, Africa, and Europe, which is often criticized as Beijing's effort to lock countries into its sphere of influence through financial obligations by way of "debt-trap diplomacy."

Jaishankar only said, "Every country would have its own policy and outlook. That is everybody's right."

The 16 countries involved in the negotiations for the RCEP, which include the 10 Association of Southeast Asian Nations members and Japan as well as China and India, have decided to give up striking a deal by the end of 2019 and continue with talks.

Commenting on the envisioned trade pact, which would create a huge free trade bloc responsible for half the world's population and about 30% of global trade, Jaishankar said, "Our issue was we wanted a fair and balanced agreement. The agreement which was on offer was, in our view, not fair and balanced."

India has reportedly expressed concerns about a lack of effective safeguarding measures to protect domestic industries from sudden surges in imports, and also about India's massive and growing trade deficit. New Delhi has suggested the possibility of withdrawing from the negotiations. Asked whether he foresaw any significant change in the future course of the negotiations, Jaishankar said, "You should be asking the other 15 countries including Japan."

The minister also downplayed the diplomatic implications of a pro-China president assuming office in India's neighbor, Sri Lanka, and argued the bilateral relationship will remain on a solid footing. Referring to recently inaugurated Sri Lankan President Gotabaya Rajapaksa, Jaishankar said, "I went to meet [the new president]. I was the first foreign minister to meet him. He has agreed to come to India on Nov. 29, it will be his first foreign visit outside. I think the facts speak for themselves."

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more