India’s trade deficit with China has been bridged by about $9.5 billion in
FY19 to $53.5 billion, but New Delhi wants deeper cuts this year.
Pushing for more action from the Chinese side to increase imports of
agricultural commodities and certain other goods from India, Commerce
Ministry officials will meet representatives from the General Administration
of Customs of China (GACC) on Thursday in New Delhi to discuss ways to
raise exports and close the bilateral trade gap further.
“The Chinese Vice-Minister of GACC will meet Commerce Secretary Anup
Wadhawan on Thursday and the two are expected to discuss the extent to
which the steps taken to increase India’s exports of farm goods to China have
yielded results and what more needs to be done. Some protocols for
agriculture exports may also be signed,” a government official told
BusinessLine.
Trade deficit
In FY19, India’s trade deficit with China narrowed a bit to $53.5 billion
compared to $63 billion the previous fiscal, but that was partly due to a
decline in China’s exports to India to $70.31 billion from $76.38 billion the
previous year and an increase in Indian exports of some items such as
organic chemicals, plastic raw materials and cotton yarn.
This followed assurances given by Chinese Premier Xi JinPing last year that
his country would take concrete measures to address the problem of trade
imbalance with India.
China has also adopted a friendlier approach towards India after it got
entangled in a trade war with the US. The Trump regime has threatened
China with more retaliatory tariffs to be imposed on Friday.
“While India’s exports to China in FY19 went up to $16.75 billion from $13.33
billion, there wasn’t any significant increase in exports of agriculture and
allied products except for certain items such as spices and marine products,”
the official said.
Eye on potential exports
New Delhi believes that a bulk of the existing trade gap between India and
China can be rectified through an increase in trade of not just the items
already doing well, but where potential exists.
The Commerce Ministry, which has done a detailed analysis of the areas
where there is scope for China to import more from India, submitted a list of
380 items earlier this year where export from the country could go up. These
include agriculture, horticulture, pharmaceuticals, textiles, chemicals,
tobacco and some engineering products.
While China has started importing grapes from India, a number of other
fruits such as pomegranates, bananas, copra, pineapple and chillies are in
the pipeline. Soyabean is another product where there is a huge scope for
exports.
“We hope that the Chinese Minister takes forward discussions on at least
some of these items and exports start soon,” the official said.
Source: The Hindu Business Line, India Thursday, 09 May 2019