-Galla S Kiran Kumar,Bureau Chief Telagana (Andhra Pradesh)
It is known that there are clashes on the border between India and China. With this, there is a demand to impose trade restrictions on that country. However, Panagariya warned that it would be our loss.
Delhi: In the wake of China’s border incursions, some circles are hearing the argument that India should sever its trade relations with that country. However, Arvind Panagariya, former vice-chairman of NITI Aayog, said that this is a loss for us. He warned that if such a decision is taken at this juncture, it will be like putting India’s economic growth at risk. Instead, India should enter into Free Trade Agreements (FTA) with the European Union and the UK.
“A trade war with China at this point means we are sacrificing our economic growth. From an economic point of view, such a decision is a completely unwise move. Many are of the opinion that China should be punished with trade sanctions in retaliation for border incursions. If that is done, the country will not sit idly by. It has shown the world how top countries like America react when sanctions are imposed. “The European Union is paying a heavy price for imposing sanctions on Russia,” said Panagariya.
It is known that a clash broke out between Indian and Chinese soldiers on December 9 along the Line of Actual Control in the Tawang sector of Arunachal Pradesh. In this incident, the Indian soldiers suffered minor injuries. It is known that this kind of incident happened in Galwan Valley in the past. Then the Indian soldiers lost their lives. In the wake of these developments, the demand to give up trade relations with China and to ban the country’s products is being heard from many quarters. Panagariya explained how its consequences will be in this context.
Panagariya said that if the two countries engage in a trade war, the loss will be greater for India. He reminded that China’s economy is 17 trillion dollars and India’s economy is 3 trillion dollars. In this context, the effect of the sanctions imposed by China on India will be more serious than the sanctions imposed by India on China, he said. Moreover, a big country like America has not got much result from the sanctions imposed on China and Russia.
Between April and October this year, India’s trade deficit with China was 51.5 billion dollars. Exports were 60.27 billion dollars. Explaining this, Panagariya said that China is providing most of the goods imported by India at the lowest price. It is said that China is not giving the right price to India’s exports. With this, the goods are being supplied to other trade partner countries like America. However, there is no need to worry about the trade deficit with China and the surplus with America.
In order to reduce the trade deficit with China, Panagariya suggested that trade with other trading partner countries should be expanded rapidly. He said it would have better results than sanctions against China. He said that India has immense opportunities to achieve significant growth at present. He said that it is necessary to provide those results for the next decade as well. They want to become the biggest economy as fast as possible. Once it becomes the third largest economy, then the impact of sanctions imposed by India will be high, he said.
