Letter to BS: Trade agreements with China provide only short-term benefits

This refers to “China has agreed to increase imports from India: Prabhu” (October 27). The current global political scenario is one where commercial activity is directly related to revenue implications of bilateral trade. China and the US have been involved in a trade war for the past few months. Accordingly, commercial imbalances caused by changes in global trading patterns have occurred leading to severe fall in the currency of several countries vis-à-vis the American dollar. The Indian rupee is one among the worst-hit even as the sustained increase in the price of crude oil hampers manufacture and, in the process, reduces returns on our exports. 

Trade agreements with China provide only short-term benefits and waivers. Hence, the Chinese opportunity cannot be relied upon. India has to look beyond it and expand its exports to Africa, Latin America and other Asian countries. 

Simultaneously, our global trade relations with the US continue to evolve depending on the software requirements of the latter. Sorting out revenue implications such as imposition of certain duties will strengthen bilateral trade in some areas. Additionally, the imposition of US trade sanctions on Iran will only aggravate the crisis we are facing unless alternative measures are taken to improve our balance of trade which will restore economic confidence, build up our foreign exchange reserves and strengthen the rupee, besides promoting industrial growth.

C Gopinath Nair  Kochi

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