India discusses trade deficit, rising imports with China

Nirmala Sitharaman and Chinese Vice-Minister of Commerce Gao Yan discussed the issues at a bilateral meeting

Don't want to miss the best from Business Standard?

India raised the issue of rising trade deficit with China on Friday, focussing on increased imports from the neighbouring country and the hurdles that exporters face in entering its markets. Commerce and Industry Minister Nirmala Sitharaman and Chinese Vice-Minister of Commerce Gao Yan discussed the issues on Friday.

“India raised the issue of market access on which Chinese government have said that they have taken steps to increase imports from India,” a commerce department official told Business Standard.

The trade deficit, difference between exports and imports, with China has ballooned to a massive $37.85 billion in 2014, according to a recent data released by Beijing.

India has been extremely concerned for quite some time now on the rising imports from China. The Chinese have often been accused of dumping cheaply priced products flooding the Indian markets, which have adversely impacted Indian businesses, especially the small and medium firms.

The central government has, therefore, decided to address the issue by increasing investments from that country to India.

According to Gao, India and China should establish a bilateral trade agreement that will help in addressing the problem. However, Indian industry is opposed to such a trade pact as they feel it will open the floodgates for Chinese goods.

The government has already announced the creation of Chinese industrial parks that will augment investments coming from that country and will help reduce the trade gap.

"I feel the Chinese have been able to enter those segments of the market where our manufacturers have not been able to focus on. Goods are coming from China but I have seen that they are coming only in those areas where Indian manufacturers have failed to capture," Sitharaman said on Thursday while addressing a press conference.

Two-way trade between both countries stood at $ 65.85 billion in 2013-2014, with trade deficit rising to $ 36.22 billion.

Sitharaman on Thursday also took part in bilateral meetings with Australia, Malaysia, Ghana and Kuwait.