Why Does India Not Reduce Chinese Imports? “Makkar” Minds Will Never Understand The Logic
India’s national security focus has shifted from the western border to the eastern one.
But our trade with China keeps rising.
Shri Shaktikanta Das, the RBI Governor said last week that the government and the RBI are in discussions with South Asian countries to increase cross-border trade and do it in Rupees only (of each )….India, Nepal, Bangladesh, Sri Lanka and Bhutan. This will be a good move but should certainly not include Pakistan at any cost.
India exports to Pakistan for FY 21- 22 was just around INR 3000 Crores and imports from Pakistan stood at INR 1400crores. This trade must be further brought down drastically and just be restricted to certain items produced by the border states. Pakistan should be forced to import from other countries, so as to increase the cost of its imports. Then only it will be forced to eject support to terrorism as its policy. India must resolve to fight terrorism politically, militarily, economically, diplomatically, socially and culturally and simultaneously.
At the same time, all the SAARC countries ( less Pakistan) must strive to increase trade among themselves to the maximum possible. The value of trade among South Asian countries currently totals just INR 195500Crores. We must aim to increase it to at least INR 600000Crores in next 2 to 3 years. All SAARC countries ( less Pakistan ) should go for a three-point agenda when it comes to trading between each other: Economic integration, adherence to multilateral trade rules and gradual elimination of all barriers. As per World Bank trade between South Asian nations accounts for only 5 per cent of the region’s total trade. Whereas the ASEAN region (comprising Brunei, Cambodia, Indonesia, Lao, Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam) the intraregional trade is 25 per cent of the total, meaning five times as much. SAARC must strive for this but Pakistan has to be kept out of this.
There are many agreements in place to facilitate trade in the region. The SAARC Preferential Trading Arrangement (SAPTA) since 1994, followed by the South Asian Free Trade Area (SAFTA) agreement in 2004 (which came into force in 2006). India’s bilateral trade with Myanmar is conducted under the 1994 Indo-Myanmar Border Trade Agreement as well as the 2009 ASEAN–India Trade in Goods Agreement (AITGA). Additionally, India and Sri Lanka signed the Indo-Sri Lanka Free Trade Agreement (ISFTA) in 1998. The agreement came into force in 2000.
Despite these agreements, trade in the neighbourhood remained far below its potential. This is exemplary of the fact that agreements by themselves are not enough to facilitate trade unless the barriers to trade are holistically addressed. The presence of para-tariffs, high logistical costs, inadequate infrastructure, and persistent informal trade, coupled with other non-tariff barriers (NTBs), are the key reasons for India’s low intra-regional trade in the neighbourhood.
Now India is working on infrastructural building and removing various logistical road blocks at a rapid rate.
Now coming back to Pak, it was granted the most favoured nation (MFN) status in 1996, when the paki supported terrorism was ascending in Jammu& Kashmir. However Pakistan has never granted MFN status to India despite being a member of the WTO regime. Finally sense prevailed and India withdrew it a day after Pakistan based Jaish-e-Mohammed terrorist group targeted a CRPF vehicle in Pulwama killing, 40 policemen on February 14, 2019.
The total bilateral trade between India and Pakistan was INR 4400 crores in 2021-2022, as per the ministry of commerce, with Indian exports outnumbering imports from Pakistan. Sharif desired to resume bilateral trade with India without giving up either the claim on Jammu and Kashmir or uprooting the India specific terrorist groups in Pakistan, taking us for a fool. It is no different from China’s desire to multiply bilateral trade with India without resolving the Indo Tibetan boundary and China Tibet boundary.
India rightly does not allow Pakistan transit facilities through its territory to Bangladesh and Nepal, showing that it is not just security that is a concern but the idea that we do not want to trade with Pakistan till it continues with terrorism as part of its overall policy. The most feasible and economic route for trade with Pakistan is the land route and so India has deliberately blocked it. The operational rail route through the Wagah border was also closed and there has been no train and no air linkages between the two nations since Pulwama. In 2019, India also hiked customs duty on all Pakistan goods to 200%. Other non-tariff barriers include non issuance of visas to traders and exporters and importers. Letters of credit, which are guarantees from a bank that the buyer will pay the seller on time and with the right amount, issued by Pakistani banks are not accepted in India and vice versa.
Customs clearance through e-filing is not available on the land route into India from Pakistan.
A World Bank report says that it is about 20 percent cheaper for a company in India to trade with Brazil instead of trading with Pakistan. India must strive to increase this cost for Pakistan to 40 %.
However now why do we still continue to trade with China, our enemy No1. In fact trade with China has risen. China’s exports to India during January-November 2022 increased INR 918000 Crore whereas our exports to China was only INR136000crores. Well this is because with so much trade in its favour, it certainly has too much to lose economically and Chinese always prefer economic strangulation rather than open warfare. So they will surely hesitate to precipitate any military misadventure. That is why they withdrew at Galwan, knowing that now they cannot beat down India militarily. This gives us time to further speed up the ramping of our border infrastructure and strengthen weapons and equipment in key areas.
Also most of the items we import from China, they are raw material / components for our items being manufactured for export/ own consumption. So unless we find alternate sources we have no choice. This is being dome too systematically.
However Pakis don’t understand economics.
