Chinese policies affect exports, says India ahead of Wen visit

Days ahead of Chinese premier Wen Jiabao's visit, the Government today said China's economic policies including the exchange rate regime are making India's exports to neighbouring nation "uneconomic and cumbersome".

Even though China is the country's second largest trade partner, India had a trade deficit of over $19 billion in 2009-10 fiscal with that country.

Minister of State for Commerce and Industry Jyotiraditya Scindia informed Rajya Sabha that there are various factors which restrict exports from India to China.

"China's macroeconomic policies, exchange rate policy and other specific non-tariff measures make exports to China uneconomic and cumbersome," he said in a written reply.

Wen Jiabao would be on a three-day visit to India starting December 15.

During the eighth India-China Joint Group on Economic Relations, Trade, Science and Technology (JEG) in January, Commerce and Industry Minister Anand Sharma had raised the issue of growing trade deficit with his Chinese counterpart.

Following the JEG, the two countries agreed to expand their trade and economic cooperation.

As per their MoU, the Chinese side shall strive to import as much of its requirement of value added goods as possible from India.

In 2009-10, India's exports to China were worth $11.6 billion while imports were at $30.8 billion.

China -- one of the world's fastest growing economy -- has come under intense international criticism, especially from the US, for keeping a low currency peg.

Most of the developed nations feel that deliberate devaluation of Chinese currency, yuan, has resulted in high trade surplus in favour of the Communist country.

G-20 countries, at their recent summit in South Korea, had pledged to act against competitive devaluation of currencies to ensure balanced global economic growth.