Aims to tame trade deficit, while commerce ministry focuses on increasing shipments.
The government is aggressively working on boosting trade with China in an effort to tame the ballooning trade deficit, that touched $20 billion in 2010-2011.
The Ministry of Commerce and Industry is working on a China-specific strategy paper to identify the areas in which it can leverage Indian shipments to China.
| TRADE ACROSS THE BORDER | ||
| Total trade between India and China | Total exports | India’s trade deficit with China |
| $63.09 bn in 2010-2011, up 48.66 % over $42.44 bn in 2009-10 | $19.61 bn in 2010-2011 from $8.32 bn in 2006-07 | $23.86 bn in 2010-2011 compared to $8.32 bn in 2006-07 |
| Some of the main items of export to China are ores, metals, iron, steel and cotton, while imports from China comprise of fertilisers, machinery, chemicals, nuclear reactors, boilers and electrical equipment | ||
While imports from China had been rising at a blistering pace since 2005, India has failed to increase its shipments to China. Exports to China have more than doubled in the last five years, but it failed to keep pace with China in terms of pricing and market access.
“We are working on a strategy paper to increase our trade with China. This will be done by focusing on certain key areas where we can increase our exports. But that does not mean we will have any restrictions on imports. There is no proposal on curbing imports from China or raising tariffs on Chinese goods,” a senior official told Business Standard, refusing to divulge anymore details on the issue.
Total export to China reached $19.61 billion in 2010-2011 from $8.32 billion in 2006-07, while cumulative imports from China topped $43.47 billion last year from $17.47 billion, according to data by the Ministry of Commerce and Industry.
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Some areas identified by the strategy papers are information technology, drugs and pharmaceuticals, textiles, chemicals, carpets, woven fabrics and leather products among others. The strategy paper would also deal with measures on how to gain more access to the Chinese market in terms of services trade with a liberal visa regime, officials said.
In a meeting of the Board of Trade last month, Minister of Commerce and Industry Anand Sharma had stressed the need to diversify the range of products beyond what is exported at present. India’s exports to China are largely commodity-based and Iron ore exports dominate export basket.
Sharma had also said that bilateral trade between Ithe two countries would reach $100 billion by 2015. The total trade volume has gone up from $2.3 billion in 2000-01 to $63.09 billion in 2010-11.
Last week, while addressing the meeting of Consultative Committee on the Commerce & Industry, Sharma also stressed on the need to double India’s export in the next three years. One of the main concerns raised by the members there was on balancing trade with China.
According to a study done by Assocham, India and China would become the world’s largest trading partners by 2030.