Highlights of the summit
Sharing data on Brahmaputra river
In a significant move, China agreed to provide India hydrological data of the Brahmaputra river in flood season, months after Beijing stopped the practice, crucial to predict floods.
China to Import non-Basmati rice
The two countries also signed an agreement under which China has agreed to import non-Basmati rice from India which is likely to bridge the ballooning trade deficit to a certain extent.
Bank of China branch in Mumbai
India had allowed China’s state-owned Bank of China to open its branch in Mumbai.
The two Memorandums of Understanding (MoUs) were signed after Prime Minister Narendra Modi held detailed discussions with Chinese President Xi Jinping on bilateral and global issues, which will add vigour to the India-China friendship after their informal summit in Wuhan.
Where did the meet take place?
Mr. Modi arrived in coastal city of China’s Shandong province on a two-day visit to attend the annual summit of the Shanghai Cooperation Organisation (SCO).
73-day standoff: last year
Last year, China stopped sharing data soon after the 73-day standoff between the Indian and Chinese troops at Doklam over Chinese military’s plans to build a road close to India’s Chicken Neck corridor connecting the north-eastern States.
MOU on Brahmaputra data sharing
The first MoU was inked between China’s Ministry of Water Resources and India’s Ministry of Water Resources, River Development and Ganga Rejuvenation upon provision of hydrological information of the Brahmaputra river in flood season.
The agreement enables China to provide hydrological data in flood season from May 15 to October 15 every year. It also enables the Chinese side to provide hydrological data if water level exceeds the mutually agreed level during non-flood season. China, an upstream country, shares the scientific study of the movement, distribution and quality of water data for the river.
Originating from Tibet, the Brahmaputra is one of the major rivers in China. From Tibet, it flows down to India and later enters Bangladesh where it joins the Ganga.
MOU on rice
The second MoU was signed between China’s General Administration of Customs and India’s Department of Agriculture, Cooperation and Farmers Welfare on Phytosanitary requirements for exporting rice from India to China, one of the world’s biggest rice markets.
The 2006 Protocol on Phytosanitary Requirements for Exporting Rice from India to China has been amended to include the export of non-Basmati varieties of rice from India. At present, India can only export Basmati rice to China.
What is the relevance of MOU on rice?
Sources said the pact on non-Basmati rice may help in addressing India’s concerns over widening trade deficit which has been in China’s favour.
China has been promising to address the issue of trade deficit with India which has been seeking a greater market access for its goods and services in China.
Trade deficit with China stood at $ 36.73 billion during April-October this fiscal. India’s trade deficit with China has marginally dipped to $51 billion in 2016-17 from $52.69 billion in the previous fiscal.
What is MOU?
Memorandum of Understanding: A memorandum of understanding (MOU) is a document
between parties to express a convergence of will to indicate an intended common line of action, rather than a legal commitment. It is a formal alternative to a gentlemen’s agreement, but generally lacks the binding power of a contract.
Agreement: An agreement is a document written between parties to work together on an agreed upon project or meet an agreed-upon objective. Agreement is binding and holds the parties responsible to their commitment.
In bilateral or multilateral relations, MOU reflects the common understanding which further leads to discussions and negotiations amongst the parties. These discussions and negotiations may or may not conclude into agreement.
(Adapted from the Hindu and background from Prepmate-Cengage IOBR, Chapter 2)