India, China talking cooperation, but need caution: Finance Minister – Economy News

Both India and China feel there is a need for more access and interaction with each other for exploring windows of economic cooperation, finance minister Nirmala Sitharaman said on Saturday, adding that such a relationship would have to be built with caution.

Speaking at the launch of a book titled, A World in Flux: India’s Economic Priorities, in Delhi, she emphasised that growth is the top priority, overlapping with job creation and value addition. Reprioritisation of domestic economic aspirations and resources mobilisation, and the need for India to be a dynamic player in global institutions and redefine its role in the global South are other top priorities, she said.

Ties with China

Responding to a question on India’s evolving relationship with China on the economic front, particularly in the context of recent developments like relaxation of visa norms, Sitharaman said: “There is some kind of a beginning.” 

“As to how far it will go, it is something we’ll have to wait and see. It might help the economy; however, much a sense of caution would have to be built,” she added.

Last week, foreign minister Subrahmanyam Jaishankar travelled to China for talks. Jaishankar said India and China must resolve friction along their border, pull back troops and avoid restrictive trade measures to normalise their relationship.

“If I can use that expression… we need more access, and we need to have a lot more interaction, and possibly opening some windows, and that’s not just from our side. Even Chinese, I think, have been approaching through the ministry of external affairs,” she said.

India imposed restrictions on investment from China, particularly through Press Note 3, to curb potential ‘opportunistic takeovers’ of Indian companies during the Covid-19 pandemic and to address national security concerns related to border tensions after Galwan clash. This policy change, enacted in April 2020, requires prior government approval for all investments from countries sharing a land border with India, including China.  

Bilateral trade takes centre stage

Talking about the current global trade scenario, she said it is bilateral trade that is taking priority over multilateral trade. “On the bilateral trade front we are moving forward and we have seen bilateral agreements signed in the past four-five years with Australia, UAE and the UK. Negotiations are progressing well with the United States as well as the European Union,” she said.

She said the government is making sure the policy on FDI is friendly enough and attractive enough, to be able to get more and more investments into India.

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