As the standoff continues on the Sino-Indian border, problems have started brewing over trade relations between both the neighbouring countries.
The genesis of the problem lies in China sending its troops to the Doklam area leading to Indian Army also positioning itself in the area leading to escalation of tension.
It’s despite the fact that a senior Indian diplomat has reassured that there will be no impact on the trade relations between the two countries. The current border standoff may not have any impact on the Indo-China trade, union commerce and industry secretary Rita Teotia recently said. Moreover, she ruled out that the on-going tiff between the two neighbours on the Sikkim sector impacting the ongoing Regional Comprehensive Economic Partnership (RCEP) negotiations.
Indian and Chinese soldiers are locked in a face-off at the Doklam area, which roughly 15 km southeast of the Nathu La Pass that separates India and China and about 30 km southwest of the river Dramana Chhu in Bhutan but which is claimed by China as well for over a month now after the army stopped their Chinese counterparts from building a road in the disputed area.
India’s trade deficit with China has marginally dipped to USD 51 billion in 2016-17 from USD 52.69 billion in the previous fiscal. The country’s bilateral trade with China stood at USD 71.48 billion in 2016-17.
It is to be noted that a ministerial level meeting of the regional trade agreement will take place in Manila in September and all the member countries.
The 16-member RCEP bloc comprises 10 ASEAN members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, Philippines, Laos and Vietnam) and their six FTA partners–India, China, Japan, South Korea, Australia and New Zealand. These 16 countries accounts for over a quarter of them over USD 75 trillion global economy.
Let’s go by the belief that the ongoing standoff will only have a minimal impact on the trade between the two countries and that the matter would be resolved by a constant and constructive dialogue between the two nations. It’s also important keeping in view the fact that the two countries are not only the largest countries in Asia, but also the fact that they two have a major say in world trade.