- "There was a good conversation on trade, an issue of concern," Indian Foreign Secretary Vijay Gokhale told told reporters.
- Modi said that relations between the two countries have remained stable over the past year and have shown a new momentum of development.
- China is India's biggest trading partner, and is responsible for India's largest trade deficit.
Indian Prime Minister Narendra Modi received Chinese President Xi Jinping in the scenic southern town of Chennai. The town has a historic old temple and is popular with tourists because it is suitable for surfing. In this seaside town, Xi and Modi held a few hours of one-on-one talks. Xi said on Saturday that he had a free and frank discussion with Modi.
“There was a good conversation on trade, an issue of concern,” Indian Foreign Secretary Vijay Gokhale told told reporters. “President Xi said China is ready to take sincere action in this regard and discuss in a concrete way how to reduce the deficit.”
In welcoming Xi, Modi said that the two leaders reached an agreement, carefully, to handle differences. Some officials expect that the two countries will make progress on a series of issues, including tourism, trade, and even joint military patrols to enhance mutual trust.
Modi said that relations between the two countries have remained stable over the past year and have shown a new momentum of development. They will handle their differences cautiously and will not let these differences become disputes. Modi took Xi to visit the ancient temple of Mahabalipuram. The temple was built in the 7th and 8th centuries.
Gokhale said the leaders of the two countries spent nearly five hours discussing bilateral issues. He also revealed that the two leaders discussed economic issues, including India’s trade deficit of $53 billion in China for 2018/19. The source told Reuters in August that China had issued a warning that if India blocked Huawei because of US pressure, it would impose ” sanctions” on Indian companies doing business in China.
Business and economic relations between India and China have grown rapidly in the last few years and many things are traded between the two countries. Trade between India and China has increased since the beginning of the century. In 2000, trade between the two countries was only $3 billion, which increased to $51.8 billion in 2008.
In this way, China became India’s largest trading partner in terms of goods, replacing America. In 2018, the trade relationship between the two countries reached new heights, and the trade between the two countries was $95.54 billion. India’s Ambassador to China claimed in June that India-China business would cross $100 billion this year.
Business is growing, but it does not mean that both are equal. According to the website of the Indian Ministry of External Affairs, in 2018, India China had a turnover of $95.54 billion, but the goods exported by India in it were worth $18.84 billion. This means that China bought fewer goods from India and sold five times more. In such a situation, some would say, China benefited in this business.
Another big thing in this is that if India is facing the biggest trade deficit with any country then it is China. That is, India is buying more goods from China and there is very little selling against it. In 2018, India had a trade deficit of $57.86 billion with China. This trade imbalance between the two countries has become a headache for India. India wants to reduce this trade deficit in one way or the other.