India to seek end to non-tariff barriers during Modi's China visit

India to seek end to non-tariff barriers during Modi's China visit
File photo of Indian Prime Minister Narendra Modi (R) shaking hands with Chinese President Xi Jinping during a meeting in New Delhi in 2014.

NEW DELHI - India will seek abolition of non-tariff barriers during Prime Minister Narendra Modi's visit to China next week, officials said, as part of efforts to reduce a widening trade deficit and boost local industry.

New Delhi wants greater market access in sectors such as pharmaceuticals, IT services and farm products including bovine meat, Trade Minister Nirmala Sitharaman said on Friday.

India buys more than 60 per cent of its bulk drugs from China mainly to produce generic drugs, but Beijing has not taken enough steps to ease rules to allow access to Indian generics - exported to more than 150 countries.

"India has also sought simplification and greater transparency in China's procedures relating to ... imports," the minister said in a written statement to the Lower House of parliament, ahead of Modi's three-nation visit to China, Mongolia and South Korea from May 14-19.

Modi will meet Chinese leaders to advance bilateral trade and attract Chinese companies to set up plants in India.

India's exports to China, its biggest trading partner, fell one-fifth to $12 billion in the 2014/15 fiscal year ending in March, while imports grew to $60.4 billion, widening the trade deficit to over $48 billion, near one-third of the total trade shortfall.

Worried over a widening trade deficit with China, the government has imposed quality standards on nearly 100 items, mainly electronic and IT products, but industry experts said it would not have much impact on imports.

The Confederation of Indian Industry has asked the government to take up market access with China to promote exports of drugs, IT and auto components.

Modi is likely to push for greater services trade when he meets Chinese President Xi Jinping, said an industry official. "India has the potential to generate more than $10 billion through export of these products to China in next 4-5 years,"said a CII report submitted to the government.

India expects an easing of Chinese rules for market access during Modi's visit as it would benefit the world's second-largest economy when it is facing its worst slowdown in decades.

Officials said both countries could also agree for more co-operation in railways and in resolving a decades-old border dispute. "India could offer a train track to China to run a bullet train besides easy terms to set up industrial parks," said a senior government official, with direct knowledge of the matter.

He said there has not been much progress on the development of two industrial parks that China had announced earlier.

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