On May 14, President Xi Jinping met with Indian Prime Minister Narendra Modi in Xi’an. The two sides made important talks on complying with the historical trend and their respective strategic needs to achieve national rejuvenation, building a closer development partnership, and promoting China-India relations to achieve a leap from “inches” to “miles”. When talking about the development plan of the “One Belt and One Road”, President Xi mentioned that the reduction of import tariffs on Indian goods will be a general trend, and with ASEAN countries (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia) Enjoying the same treatment will be a necessary condition for the smooth development of the “One Belt, One Road” initiative.
It is understood that since January 1, 2010, more than 90% of products between China and the six old member countries of ASEAN have achieved zero tariffs. China’s average tariff on ASEAN has dropped from 9.8% to 0.1%. The average tariff on China has also dropped from 12.8% to 0.6%. By 2015, trade liberalization between China and the four new ASEAN member states will reach the same level.
As an important country on the “One Belt and One Road” initiative, India is the world’s largest cotton producer and one of the world’s largest cotton yarn exporters. The introduction of tariff reduction and exemption policies is bound to have a major impact on the country’s cotton industry. According to industry insiders in India, during the Indian Prime Minister’s visit to China, Chinese leaders stated that they would promote cotton yarn trade between China and India and promised to reduce import tariffs on Indian cotton yarn. According to an industry insider, the two major advantages of tariff reduction and exemption and no quota restrictions on cotton yarn imports may promote another breakthrough in China’s India-Pakistan yarn imports, and will promote the rapid transformation of domestic cotton and textile companies. India has promised to reduce import tariffs on Indian cotton yarn. The figure below shows the lowest tax rate for China’s cotton yarn imports from various countries and regions.
