Efforts to close India’s gaping trade deficit with China, which widened to a record $48 billion in 2014-15, will top Prime Minister Narendra Modi’s economic agenda during his visit to Beijing later this week.
Modi will not only insist on market access for key products such as pharmaceuticals, agricultural items, IT products and automobile components, but also call for fast-tracking of Chinese investments in India’s industrial corridors and towns, a Commerce Ministry official told BusinessLine .
The latest trade numbers show that India’s exports to China declined almost 20 per cent to $11.95 billion in 2014-15, while imports increased over 18 per cent to $60.39 billion. The trade deficit jumped almost 30 per cent during the year, and is now more than a third of the country’s total trade deficit.
“The trade numbers are alarming. The situation cannot be allowed to deteriorate further,” the official said. Over the past two years, the Chinese government has been making several promises to India to address the trade deficit, including signing MoUs for improved market access in items such as bovine meat, oil meal, IT and pharmaceuticals.
However, little has moved on the ground. private refiners
“The PM, in his meeting with Chinese Premier Li Keqiang, will insist that whatever had been promised to India should be delivered. Mere lip-service is not good enough,” the official said.
China, which sells a large quantity of bulk drugs to India, continues with several import restrictions despite agreeing to buy more generic medicines.
“The Chinese law makes its mandatory for hospitals to buy more patented medicines and less generic medicines. This restrictive law, coupled with complex registration processes, makes it extremely difficult for Indian generic producers to penetrate the Chinese market,” the official said
IT products purchase Similarly, while state enterprises in China are open to buying IT products from foreign companies, the non-transparent bidding process makes it difficult for Indian IT companies to bag orders.
China has also not started sourcing bovine meat from India despite promising to do so two years ago.
“There is definitely scope for China to import more from India.
“We are taking a delegation to the country next month to look for opportunities for items such as automobile components and coir and jute,” said Ajay Sahai, DG & CEO of the Federation of Indian Export Organisations.