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China's WTO entry to open up opportunities for Indian business

The World Trade Organisation's acceptance of China's membership bid is expected to open up China's vast market to Indian businesses in areas like agriculture, chemicals, pharmaceuticals, banking and insurance, official sources in Beijing said.

Under the India-China bilateral agreement on Beijing's accession to the WTO, signed in Beijing on February 22, last year, China has promised to open up its markets to Indian products and services once the communist giant becomes a full-fledged member of the Geneva-based multilateral trade body.

TARIFF RATE

As part of the agreement, China has promised that the tariff rate quotas that will be established for agricultural products, such as rice, will be global quotas and will not be allocated selectively among different supplying countries.

"The tariff rate quotas will be administered in a manner that will provide an opportunity for Indian exporters to supply the products on terms and conditions, which are transparent and non-discriminatory," the memorandum of understanding signed by the two sides says concerning agriculture products.

AGRICULTURE

Further, China has agreed to fully take into account the concerns of India before finalising the tariff rate quota system for agricultural products.

China's imports of agricultural products like rice, wheat, cotton, corn, marine products, fruits and vegetables are expected to rise substantially after the WTO accession.

At the same time, unless Indian agricultural products' exporters improve their efficiency, they are unlikely to succeed in the Chinese market, which is dominated by producers from countries like the US, Canada, Argentina and Thailand, an official source said.

PHYTO-SANITARY MEASURES

On phyto-sanitary measures, China has promised to review the current plant quarantine restrictions on the import of mangoes and other fresh fruits and vegetables from India into China.

Both sides have agreed that internationally recognised phyto-sanitary norms and procedures will be applied in respect of agricultural products traded between the two countries and the measures shall be transparent and based on scientific principles.

PHARMACEUTICAL

On the pharmaceuticals sector, where Indian companies are active in China, the Chinese side has promised to implement non-discriminatory laws, regulations and measures with regard to imports, distribution, sale and supply of pharmaceuticals, including in respect of registration of drugs.

In the past, Indian pharmaceutical firms have experienced non-tariff barriers to exports from India and these are likely to reduce consequent to China's WTO accession.

China's imports of pharmaceutical products increased from $386 million in 1998 to $627 million in 1999. In the post-WTO accession scenario, Beijing's imports of pharmaceutical products are likely to increase, raising more opportunities for Indian companies, sources said.

BANKING AND INSURANCE

With regard to banking and insurance sectors, China has pledged that it would keep in mind the interest of Indian banks and insurance companies to establish commercial presence in China and agreed to give "positive consideration" to their applications as and when submitted.

"While the bilateral agreement is in place, it would depend on the Indian business community to exploit the favourable situation that will arise out of China's WTO accession," one source commented.

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