China and India can overcome trade obstacles with a shared commitment to mutual benefits, said the Indian Embassy in Beijing. In its response to Beijing Review's article "Stumbling Blocks for China-India Trade" (www.bjreview.com.cn) published on September 17, the embassy points out that the two countries should realize that each "has a vested interest in the success of the other" before they can jointly create a bright future. Excerpts of the embassy's comments follow:

Ties between India and China, like any other relationship, are a glass both half full and half empty. There is much that has been accomplished and much that remains to be done. When it comes to political trust, few can dispute that the two countries have come a long way in the last two decades. The frequency of contacts at the leadership level is unprecedented. So too is the breadth of the engagement and the substance of the cooperation. During Chinese President Hu Jintao's visit to India in November 2006, the two countries set themselves a bilateral trade target of $40 billion by 2010. This was reached two years in advance, in 2008. Chinese exports to India reached $31 billion in 2008.

Trade imbalance between China and India is indisputable. Indian exports to China are mainly primary products while Chinese exports are largely manufactured goods with high added value. It would, of course, be enlightening to understand why this is happening. India typically is not an exporter of primary products per se and the trade basket with China is an exception, not a rule. Not only does India manufacture value-added goods like electrical products, machinery, plastics, organic chemicals, chemical products and iron and steel, but it actually has penetrated the Chinese market in a very limited way in each of these categories. The problem is that restricted market access and tariff/non-tariff barriers have limited the scope for growth.

Indian industry has longstanding concerns that Chinese policies make its companies give preference to domestic production over imports. Local content stipulations have also constrained India's ability to compete in the Chinese market. Sharp increases on import duties of completed equipment have obviously had their intended impact. Industry players are also acutely aware of the tariff and non-tariff barriers that they face in supplying fertilizer, coal gasification and refinery plant equipment to China. The barriers to greater trade in agricultural products are no less daunting. Despite a memorandum of understanding on the application of phytosanitary measures concluded in 2002, China has provided India with market access to only three out of 17 varieties of fruits and vegetables that had been sought.

India's trade regulations are applied uniformly and supported by a strong legal framework. They are intended to ensure free trade, not to restrict competition. India's long record of fair play on trade is widely recognized. On October 11, India decided to terminate safeguard investigations against the import of passenger car tires from China. This decision of the Indian Government has been appreciated by the Chinese Ministry of Commerce.

With wise leadership and sincere implementation, all obstacles to India-China trade can be surmounted. The real limitation is the old mindset that views bilateral relations as a zero-sum game, rather than striving to create win-win solutions. It is when each country realizes that it has a vested interest in the success of the other that we can be truly confident of our joint future.