India and China are poised to achieve US $ 20 billion bilateral trade turnover by the year 2007, a year ahead of the target set earlier, Shri Kamal Nath, Union Minister of Commerce & Industry, indicated in his keynote address at the India-China Joint Business Forum here today where Mr. Bo Xilai, Minister of Commerce of the People's Republic of China, was the Guest of Honour, along with a large business delegation from China. The two Ministers earlier co-chaired the 7th Meeting of the India-China Joint Economic Group (JEG), which took place after a gap of six years. "That it coincides with the celebration of India-China Friendship Year is of additional significance. I also note that this is the first JEG meeting after China's accession to the World Trade Organisation (WTO)", Shri Kamal Nath observed. Both Mr. Xilai and Shri Kamal Nath emphasised that trade and economic cooperation held the key to strengthening the overall bilateral relationship.

"I reiterate India's deep desire and strong commitment to continue developing a multi-faceted, mutually beneficial trading and economic relationship with China", Shri Kamal Nath said. Mr. Xilai in turn during his bilateral with Shri Kamal Nath recalled the traditional ties between India and China dating back many centuries when the two countries together accounted for more than 20% of the world's total trade and called for "recapturing the old glory".

During the year 2000-01, the bilateral trade volume was barely US $ 2 billion. This increased to US $ 11.3 billion in 2004-05. "This year our bilateral trade will be in excess of US $ 15 billion", Shri Kamal Nath said, reflecting rapidly expanding bilateral economic relationship. At the same time, he stressed the point both at the JEG Meeting as well as the Joint Business Forum that the trade basket continued to be narrow and restricted to a limited range of goods. "For instance, Indian exports are dominated by raw materials and products of natural resource based industries. If our trade is to expand exponentially it is imperative for both partners to diversify the trade basket. Between us we produce practically everything - and produce it cheaply, and with good quality. We both have export growth rates that are 25 to 30%. While our engagement with the rest of the world is galloping, we must make doubly sure that it gallops with each other", he said.

The JEG discussions focussed on implementation of the recommendations of the Report of the Joint Study Group (JSG) which was constituted in June 2003 by Prime Minister Dr. Manmohan Singh and Premier Wen Jiabao to examine the potential complementarities between the two countries. The agenda included review of bilateral trade since 2000 and issues of bilateral trade and economic cooperation relating to market access for agricultural, industrial goods and services; non-tariff barriers; restrictive regulatory regimes etc. besides discussing the deliberations of the Joint Task Force on India-China Regional Trading Arrangement and talks on a Bilateral Investment Protection Agreement.

Shri Kamal Nath also underlined the need to decide on an early operationalisation of the border trade across the Nathu La pass.

India-China Bilateral Trade: Backgrounder

During the visit of Premier of the State Council of the People's Republic of China to Republic of India in April 2005, the two countries agreed to make joint efforts to increase the bilateral trade volume to US $ 20 billion or higher by 2008.

Since 1997-98, Indo-China trade has registered a growth of 260% i.e., average yearly growth of around 33%.

The volume of trade with China during the last 5 years i.e., from 2000-01 to 2004-05 has increased by 224%, registering an annual average growth of around 44%.

Since 2000-01, the highest trade growth of about 62% was registered in 2004-05.

During 2004-05, India's balance of trade deficit with China has almost doubled as compared to 2003-04 and amounted to US $ 2.2 billion.

India-China border trade opened in Uttaranchal on July 15, 1993; second border trade point opened in Himachal Pradesh in 1994 and memorandum for third border trade in Sikkim in Beijing in June 2003. During 2004, the border trade amounted to Rs.1846 lakhs.

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