Chennai: In a bid to narrow the widening trade deficit with China, India has identified and shared a list of 380 products including textiles, chemicals and pharmaceuticals, to the neighbouring country.
Incidentally, the country has chosen sectors from which shipment of goods will hold huge export potential. The trade deficit stood at $50.12 billion during April (2018)-February.
As it stands…
During the period, India’s exports to China grew by 28.61 per cent to about $15 billion, while imports contracted by 6.29 per cent to about $65 billion. The top items of export to China from India in 2018-19 were petroleum products, organic chemicals, cotton yarn, plastic raw materials and iron ore.
Commerce Minister Suresh Prabhu, who chaired a recent meeting attended by officials from key Ministries and Departments such as steel, pharmaceuticals, MSME, agriculture, animal husbandry, fisheries and IT, said the final goal for India should be to have a trade surplus with China.
Exports rise, problems too
Reports state that in the recent months, India’s exports of marine products, cotton, organic chemicals, grapes and plastics have increased significantly. Indian exporters face certain non-tariff measures in Chinese markets, which restrict exports to that country.
Recently, India managed to export agricultural goods such as non-basmati rice to China, as it seeks greater market access for various agricultural products, animal feeds, oil seeds, milk and milk products, pharmaceuticals in light of the potential of these products/services in the Chinese market.
According to a PTI report, Chinese Vice-Minister for General Administration of Customs of China (GACC) is expected to visit India to discuss trade related issues. In that meeting, some more protocols for India’s exports are expected to be finalised, it added.
Boycotting an option?
India is heavily dependent on Chinese products, most importantly machinery, electrical and chemicals. The country also imports intermediate and consumer goods from the most populated nation on the planet.
India’s manufacturing sector is dependent on Chinese goods too, with industries such as pharma and electronic gadget makers depending on parts from the nation.
In 2018-19, China supplied over 60 per cent of electronic products and components imported by India and 80 per cent of the antibiotics.
The power sector of the country has to depend on China to achieve its renewable energy target. In a written reply to the Lok Sabha last year, New and Renewable Energy Minister, R K Singh, said India’s import dependence for meeting its solar equipment demand was over 90 percent in past three financial years.
The value of solar cells/photovoltaic cells imported from China jumped to $3.41 billion in 2017-18 from $596.73 million in 2013-14, the Minister informed.
In the long run, experts state, both countries will be affected as China too depends on India for Sugar, among other things. India became the 24th largest exporter to the nation just two years ago.
| In numbers |
| In 2017, the India-China bilateral trade reached a historic high of $84.44 billion, up 18 per cent year-on-year (y-o-y), according to World Integrated Trade Solution data.
Data from the Commerce Ministry states India’s trade deficit with China was $63 billion in 2017-18, which was more than a third of the country’s total trade deficit. The country’s exports to China stood at $13.3 billion and imports from the country at $76.38 billion in 2017-18. In 2017, India’s trade deficit with China was $51.75 billion, registering a growth of 8.55 per cent y-o-y. |