Trade deficit with India unsustainable: China
Commerce and Industry Minister Suresh Prabhu said the trade deficit issue remained among the foremost of problems in expanding of economic relations India’s imports from China were $61.3 billion and exports at a much lower $10.2 billion in 2016-17
The Chinese government has agreed that a massive imbalance in its trade with India is “unsustainable” for long-term trade growth and needs to be addressed.
On Monday, the sentiment was shared by a Chinese delegation led by Commerce Minister Zhong Shan, senior sources in the know said. The minister, stated the commerce and industry ministry after the meeting, “welcomed Indian investment in China and promised to address the trade deficit”.
The bilateral engagement, under the aegis of the India- China Joint Group on Economic Relations, Trade, Science and Technology, was used by Delhi to push hard on the subject. And, to get less restrictions on agricultural export.
“After the lengthy military standoff at the disputed Doklam plateau of Bhutan, further conclusive talks on trade issues looked slim since last year. Shan’s visit signifies that China wants to engage a major trade partner,” an expert said.
India’s imports from China were $61.3 billion and exports at a much lower $10.2 billion in 2016-17. The government has been worried by increasing friction between the US — India’s largest export destination — and China, this country's largest import source, which could lead to a fall in global demand and rise in the cost of trade.
Commerce and Industry Minister Suresh Prabhu said the trade deficit issue remained among the foremost of problems in expanding economic relations. He asked his counterpart for greater market access for agricultural products such as rapeseed, soybean, basmati and nonbasmati rice, fruit, vegetables and sugar.
The two governments had signed an agreement in September 2014 to achieve bilateral trade balance by 2019, via promotion of trade and investment. The agreement also talked of easing the restrictions by Beijing against highpotential export items from here, such as bovine meat, fruit & vegetables and basmati. Of these, only basmati has seen a breakthrough, with 14 companies allowed to export to China in 2016.
The government also said at the meet that India was looking to expand its export of pharmaceuticals. India’s exports in this segment were $27.1 million in 2016-17, a rise of 18 per cent. It also pitched for export of information technology and its enabled services, apart from cooperation in the sectors of tourism and health care.
The delegations also talked about the proposed Regional Comprehensive Economic Partnership, a free trade agreement being negotiated between the Association of Southeast Asian Nations and six other nations — Australia, China, India, Japan, South Korea and New Zealand.
India and China have often been at opposite ends on the issues of tariff reduction on merchandise trade and broadening of services trade, among others.