Measures to Address Trade Imbalance Between India China Get Fillip

Zinc concentrates & copper concentrates, cotton yarn and cotton linter, frozen fish/linter, methanol, castor oil & gaur gum, Indian granite block and cedrus deodara seed are the most sought after items of export from India which have generated interested among Chinese businessmen. It is to be noted that purchase of zinc concentrates & copper concentrates worth USD 130 million, purchase of cotton yarn and cotton linter worth USD 93 million, purchase of frozen fish/linter worth USD 68 million, were the prominent products for which Memorandum of Understandings (MoUs) were signed during the India-China Business Matchmaking Symposium for boosting exports from India to China. The day-long meeting saw around sixty Indian companies from various sectors engaging themselves with an aim to find ways to address the trade imbalance. For this, fifteen MoUs worth USD 338 million were signed between Indian and Chinese companies here yesterday. This model will be replicated in other cities also.

This step is among various other steps initiated by both the countries in the recent past to take the trade agenda forward on different fronts. Earlier in May 2013, India and China signed three Memorandum of Understandings (MoUs) on buffalo meat, fisheries and pharmaceuticals; and one agreement on feed and feed ingredients. The MoUs were signed during the visit of the Premier of the State Council of the People’s Republic of China, Mr. Li Keqiang to India. With the implementation of the above MoUs, export of buffalo meat, and feed and feed ingredients to China are expected to benefit. With the operationalisation of the MoU on co-operation on Pharma between China Chamber of Commerce for Import and Export of Medicines and Health Products (CCCMHPIE) and the Pharmaceuticals Export Promotion Council of India (Pharmexcil), Indian generic drugs are expected to get market access in China.

In August 2013, when Union Minister for Commerce & Industry Shri Anand Sharma met Chinese Minister of Commerce Mr. Gao Hucheng, the Chinese Minister assured Shri Sharma that China would make every effort to facilitate imports from India for bridging trade imbalance. Earlier, during the visit of Chinese Premier Mr. Li Keqiang to India in May 2013, both the sides while striving to realise the trade turnover target of USD 100 billion by 2015, agreed to take measures to address the issue of the trade imbalance. These included cooperation on pharmaceutical supervision including registration, stronger links between Chinese enterprises and Indian IT industry, and completion of phytosanitary negotiations on agro-products.

Major items of Indian exports to China include cotton raw & yarn, non-ferrous metals, iron ore, other ores and minerals, plastic& linoleum products, spices, Dyes/intermediates, machinery & instruments and petroleum (crude& products). Major imports from China include electronic goods, machinery, organic chemicals, project goods, fertilizers, iron and steel, transport equipments, electric machinery (except electronics) and manufactures of metals. While on the other hand, major imports from China include electronic goods, machinery, organic chemicals, project goods, fertilizers, iron and steel, transport equipments, electric machinery (except electronics) and manufactures of metals.

The bilateral trade between both the countries reached around USD 68 billion in calendar 2012, which is less than bilateral trade in calendar 2011 (US$ 73 billion) due to the slight slowing of economic growth in both countries. There has been fall in bilateral trade of 10.28% during the year 2012-13 but still the trade deficit for India for 2012-13 crossed USD 40 billion which is 3.49 % more than USD 39.44 billion deficit in the year 2011-12. China has emerged as our largest trading partner. India ranked 16th among the countries exporting to China while India was the 7th largest export destination for China in 2011.