A beginning but with caution: Sitharaman hints at easing India-China economic ties; says ‘we need a lot more interaction’

Finance minister Nirmala Sitharaman on Saturday signaled a possible revival of India-China business relations, saying both sides have shown interest in reviving economic engagement after years of tension. Speaking at a Delhi event to mark the release of a book in honour of economist Shankar Acharya, the finance minister noted that “a beginning has been made” following external affairs minister S Jaishankar’s recent visit to China.Sitharaman said stakeholders within India have been urging the government to ease investment restrictions on Chinese firms, and that Beijing has also reached out through diplomatic channels.“We need more access, and we need to have a lot more interaction, and possibly open some windows. And that’s not just from our side, even the Chinese have been approaching through the MEA,” she said.“There is something, some kind of a beginning, as to how much it will take us far; how far it will go is something we will have to wait and see. It might help the economy; however, a sense of caution would have to be built in,” she added.Ties between the two nations soured sharply after the 2020 Galwan Valley clash in Ladakh, prompting India to impose tighter foreign direct investment (FDI) norms for neighbouring countries, suspend tourist visas for Chinese nationals, and ban several Chinese apps. These restrictions came alongside the onset of the Covid-19 pandemic.In recent months, however, both sides appear to be taking tentative steps toward normalisation. India resumed issuing tourist visas for Chinese nationals this week to advance Indian renewable projects.While China lifted its visa restrictions on Indian citizens in March.Jaishankar visited China recently, his first visit in six years, meeting Chinese President Xi Jinping as both nations work towards improving relations.The government had earlier made exceptions to allow Chinese professionals involved in key renewable energy projects to return.Sitharaman also highlighted progress in India’s broader trade diplomacy, noting that bilateral trade talks with the US and European Union are advancing well. “It is bilateral trade which is taking priority over multilateral trade. On the bilateral trade front we are moving forward and we have seen bilateral agreements been signed in the last four-five years with Australia, UAE and the UK. Negotiations are progressing well with the United States as well as the European Union,” she noted.