China, India studying potential for regional trade pact

Mumbai: China and India will complete a joint study on a potential regional trade pact, which could play a key role in Asian economic integration, by October.

"Government agencies and research institutions from the two sides, headed by the commerce ministry and the Indian department of commerce, have conducted a feasibility study on the regional trade arrangement," China''s vice minister of commerce Yi Xiaozhun said.

Yi said the study would play a key role in the economic integration of Asia if it leads to a regional trade pact linking China and India. The move also comes amid an impressive 57 per cent growth in bilateral trade.

"We expect to complete the study by October," the China Daily quoted him as saying. The study was kicked off in New Delhi in March 2006. So far, three rounds of working panels have been held studying issues concerning trade in goods, trade in services and investment.

In 2005, the two Asian giants pledged to bring bilateral trade volume to $20 billion by 2008. That target was achieved ahead of schedule and the two governments have now set a new target of achieving $40 billion in bilateral trade by 2010.

"If we increase our bilateral trade at this speed (57 per cent), I think we can reach $40 billion by 2009, an year earlier than targeted," vice chairman of the China Council for Promotion of International Trade (CCPIT), Wang Jinzhen Wang said at a recent India-China business meeting.

According to the Chinese ministry of commerce, India was China''s 10th-largest trade partner in 2006, while Indian statistics showed China was India''s second-largest trade partner after the United States.

Chinese investment in India totalled $17 million by the end of last year, mainly in the sectors of electronics, communications and light industry.

With the Doha round of world trade talks still in a limbo, China is also seeking increased regional economic cooperation with other countries of the region, the Chinese vice minister said.

Commerce ministry statistics said trade between China and India hit $24.9 billion last year, exceeding the $20 billion goal two years ahead of target.

In the first quarter (Jan-Mar) of this year, India-China bilateral trade touched $8.22 billion, up 56.97 per cent over the same period last year, latest Chinese customs figures showed.

Indian exports to China during January-March were worth $3.56 billion, up 43.61 per cent over the same period last year.