Prime Minister Narendra Modi will make a strong pitch to narrow India’s trade deficit with China — it crossed the $40 billion mark in 2014-15 — during his visit to the country next month.

“If there is to be a future for an India-China bilateral trade relationship, then the worrying issue of the trade deficit has to be addressed. We are confident of the PM making a very strong pitch for the whole issue of the deficit,” Commerce Secretary Rajeev Kher told the media on the sidelines of a seminar on India-China economic relations, at the Global Exhibition on Services (GES), on Friday.

The GES is jointly organised by the Commerce Ministry and CII.

Widening deficit India’s trade deficit with China, at $44 billion in the April-February 2014-15 period, is more than a third of the country’s total trade deficit, according to official figures.

In the 11-month period, imports from China increased 18.18 per cent to $55.77 billion, while exports declined 18.88 per cent to $11.01 billion.

Kher said that the government was working on a three-pronged strategy to narrow the trade gap with China. The first is to identify the areas where India is strong and can contribute to the Chinese economy, and to then seek effective market access from China in these areas. Such areas include pharmaceuticals, IT/ITES, food products and agriculture, and auto components.

“We are identifying obstacles to market access in these areas and are taking it up at the Government-to-Government level, asking China to be more rational and facilitative,” Kher said. He added that India had become more aggressive in its approach and had asked the Government to also be more transparent in its procedures. India is also trying to see how to channelise Chinese investments into India in order to reduce imports from the country, and tap Chinese technology and capacity.

Kher said that China has expressed interest in setting up industrial parks in the country. “It has to be ensured that these fructify on time, because the more investments get delayed, the wider the trade deficit will get,” he said.

India also needs to work with China in global forums such as the World Trade Organization and in the ongoing negotiations for a Regional Comprehensive Economic Partnership (RCEP) as the two can have a better say jointly.

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