New Delhi, June 28 : The Cabinet today approved a proposal which will enable India and China to enter into a mutual tariff concession agreement to boost trade between the two countries.
Parliamentary affairs minister Sushma Swaraj told reporters that the Cabinet has given a go-ahead to including China in the four-nation Bangkok agreement which will enable India and China to extend tariff concessions to each other as well. “This will mark a new milestone in India-China trade relations,” she added.
At present, the Bangkok agreement is in operation between India, Bangladesh, Korea and Sri Lanka. China will become the fifth member after its accession to the agreement.
China has already presented a list of 182 items to India on which they are willing to give tariff concessions to Indian exports . Similarly, India has offered a list of 217 items on which it is ready to extend tariff concessions to Chinese exports.
The concessions offered by China include tariff preferences on several products already being exported by India. These include chemicals, leather, textiles, and diamonds.
In effect, after the exchange of concessions, India will be eligible for concessions on 722 items, which cover around 25 to 30 per cent of our total exports to China in value terms.
India, on the other hand, grants concessions on 106 items corresponding to 188 tariff lines under the Bangkok agreement which will now also be available to China on its accession to the agreement.
According to the government, these 188 tariff lines will cover around 2.2 per cent of our imports from China in value terms. The entry of China is expected to boost the volume of trade among the Bangkok agreement members since the size of the Chinese market is very large. At present, the trade between the four members is quite low.