Plans to liberalise trade between India and China, the world’s two fastest-growing large economies, have gathered momentum with both sides exchanging offers on removal of a chunk of tariff lines on goods imports. Against India’s offer to remove 42.5% of tariff lines under the 16-country Regional Comprehensive Economic Partnership (RCEP), China has expressed its willingness to abolish equivalent amount of tariff lines for India.

Cotton fibre and yarn, copper and some organic chemicals are the major items that India has exported to China this fiscal, while its imports from China include electronic items, mechanical appliances, organic chemicals, fertiliser and iron and steel. Earlier, India used to export huge quantities of iron ore to China before curbs were placed on their mining.

India’s merchandise exports to China stood at a mere $11.9 billion in 2014-15, while China’s exports to India were to the tune of $60.4 billion.

Successful RCEP negotiations would essentially pave the way for a virtual free trade agreement (FTA) between India and China, as India already has FTAs with other members in the grouping. RCEP comprises 10 Asean nations and six others with which these countries have already forged FTAs.