March 18, 2002

`19’

NEW VISTAS OF GLOBAL TRADE WITH CHINA

    A nine member Chinese Daelegation led by Mr. Xu Kunyuan, Vice Minister, China National Textile Industry Council, an apex Government body looking after the textile industry in China, called on Shri S. B. Mahapatra, Secretary, Ministry of Textiles, Government of India in New Delhi this morning. During the meeting, Secretary, Mr. S.B.Mahpatra impressed upon by Chinese Delegation that in the new emerging scenario especially after M.F.A. ending in 2004 and of quota regime vanishing, the co-operation between Indian and China has to be redefined. He said Indian Textile Industry provides greatest employment opportunities in rural and urban areas and contributes to more than 30% of the total export. It is also the largest and diversified sector consisting of cotton, polyster, blended cotton, silk, jute and wool being used as manufacturing material. Govt. has taken several steps to grow this sector and has opened up this sector. Now there is no restriction on investment or reflow nor does it have any quantitative restrictions on imports in textile sectors. Even tariffs have been come down considerably. The peak Tariff during 2002-2003 will be 30%. In case of many textile items, the tariffs are even less than 20%. The Government has already announced its policy to bring the tariff rates further lower to the ASEAN levels. Now there is no restriction of Foreign Direct investment in Textile sector. The knitwear sector has been deserved, the secretary explained.

    Mr. Mahapatra clarified that steps are being taken to modernize this sector. Like China, India too has state own textile mills but now the major thrust is to make this sector more competitive and in the coming times mills are likely to be privatized. He admitted that Indian Textile Industry is lagging behind in ginning and processing and it is in this field that India can take advantage of the Chinese textile machinery and technology. The Secretary reminded the delegation of centuries old bilateral Trade relations between the two countries. Silk is being imported from China. for the last so many decades India is producing 15,000 tonnes of silk against the requirement of 35,000 tonnes and this gap is largely met by importing silk from China. Mr. S.B.Mahapatra stressed even in the field of jute also, both the countries can collaborate as it being eco-friendly material is ideal for packaging. He urged both the countries can find new vistas of bilateral trade in the South East Asian and Middle East countries than the developed countries.

    The Chinese Vice Minister, Mr. Xu Kunyuan expressed the hope that both the countries with better understanding can explore better possibilities and environment for bilateral trade collaboration in future. During the last 20 years China has doubled its processing capacity. Now since the industry has become more market oriented, it has to be more competitive as well as low priced. Both the countries can focus on various issues like technology upgradation sharing of raw material machinery and technical knowledge. As silk is much in demand, in the international market both the countries can excel in this filed. The Indian designs are very popular in South Asian and Middle East Countries. With Indian designs and Chinese raw silk the global market can be captured. China has better exports in U.S. and E.U. market. India experienced negative growth rate of 5.7%. During 2000 whereas shipment from China increased by 10%.

    Mr. Mahapatra suggested formation of a Joint Business Council comprising of members from both the countries. This council can prove instrumental in promoting better bilateral trade and understanding. With China becoming member of W.T.O., India and China can have similar approach towards the problems faced by exporting developing countries. Both the countries can develop a similar approach in issues pertaining to the Rules of origin and other new tariff barrier being created by the importing countries.

Table Showing India-China Bilateral Trade

(US$ Million)

Textile Imports from China at a glance (Provisional)

(US$ Million)