This refers to “India and China resolve key tax issues to facilitate trade” (December 3). The growth of industry in India has been stagnating for quite some time. Therefore, it necessitates a return to international trade. This is also to be seen in the background of a truce in the ongoing trade war between the US and China which is indirectly providing greater flexibility, direction and certainty to the movement of our foreign trade. Although political relations with China are delicate, India has to capitalise on the opportunity to improve business relations with the neighbouring country by granting relief in taxes as envisaged in the Mutual Agreement Procedure (MAP) with other countries. The removal of double tax barriers to facilitate trade with China is a welcome step in this direction as our economic relationship with them is growing from trading to investing.
The export of rice and fish to China will not only promote our foreign trade but also give a boost to the contribution of the agricultural and allied segment, offering it a bigger role in increasing our gross domestic product. The double taxation relief provided by MAP helps remove trade barriers among countries which are parties to this decision. This will further ensure a more cohesive commercial and political relationship between India and China. Revisiting earlier treaties to modify and update them in keeping with prevailing global conditions call for the execution of fresh agreements at a time when foreign investment is being encouraged in the economy. Being open to inspection of product quality is also a market friendly approach encouraging growth in trade.
C Gopinath Nair Kochi
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