Visas to trade: Some India-China hardtalk before the talks

Having held back its consent for the new visa agreement with China ahead of Prime Minister Manmohan Singh's visit , India Tuesday signalled it would eventually sign the pact but not before it had made the Chinese side "sweat for it".

Sources confirmed, as reported first by The Indian Express, that the government had decided to pull back on the agreement at the last moment to protest against the Chinese issuing stapled visas to two archers from Arunachal Pradesh.

In fact, New Delhi had conveyed its decision to Beijing before Singh's trip.

"All issues will be raised," sources said when asked if this would come up in talks.

If stalling the agreement was aimed at setting the record straight on the status of Arunachal Pradesh, Singh, who arrived here late Tuesday, did some similar plain talking on trade issues too. He made it clear for the first time that India cannot enter into a free trade agreement or what the Chinese call a regional trading agreement unless there is a drastic reduction in the trade deficit which now stands at over $25 billion.

"I am sure the commerce ministers will continue to discuss the idea. But I must be honest that there is a great deal of concern in our industry, given the large and growing deficit in our trade with China. When conditions are more propitious and trade is more even, we will find it more feasible to discuss an RTA or FTA between our countries," Singh said in an email interview to the chinese media before his arrival in Beijing.

Until now, India had shied away from clearly linking the growing trade deficit and China's RTA proposal. When Chinese Premier Li Keqiang visited India earlier this year, India had agreed to start a conversation at the commerce minister's level to explore the idea.

on the visa agreement sources clarified that New Delhi cannot hold up the agreement for long as Indian businesses too stand to benefit as it provides for a one-year business visa with a single-duration stay limit of six months. "Our own IT companies want it and have been asking for it," the sources said.

Yet, it was felt at the highest levels that India must not send confusing signals on these issues to China. The logic being that if not checked right at the start, these small issues become more intractable as it happened in the case of stapled visas for residents of Kashmir.

A similar approach seems to have guided the talks on the Border Defence Cooperation Agreement that is set to be signed after talks Wednesday. Here again, Singh made it clear in his interview that India views this as improved versions of existing border protocols and not something new which overrides prior arrangements.

"As long as we follow the principles and procedures set out in the agreements of 1993, 1996 and 2005, expand and improve upon them where necessary to take into account the changing reality of India and China and enhance dialogue and friendly exchanges between our border troops, I am confident that the strategic consensus between leaders will be reflected on the ground," he said in response to a question on border cooperation.

The initial proposal from the Chinese side was far more ambitious and contained provisions which the Army felt indirectly meant freezing of troops at current levels on the Line of Actual Control. It was after the Depsang crisis that the conversation on this agreement gathered pace with India eventually getting China to remove some of the contentious parts.

Government sources, however, sought to clarify that for all the attention the boundary issue gets, it continues to remain one of the most peaceful unsettled borders in the world. They pointed to the fact that the last death on the LAC occurred in October 1975 and that too was an accident.

Overall, sources said, border management measures have been successful and added that face-off-like incidents are in the nature of the problem which stems from differing perceptions of the boundary by both sides. "In 1987, it took seven years while Depsang was resolved in three weeks," they added, referring to the Wangdung incident.

And despite the irritants, Beijing has planned to lay out the red carpet for Singh. While Premier Li Keqiang is hosting lunch for him Wednesday, President Xi Jinping is hosting dinner. On Thursday, former PM Wen Jiabao, with whom Singh shared a good equation, is hosting him for lunch.

Premier Li, sources said, could even accompany Singh on a tour of the Forbidden City.

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