The bilateral trade between India and China declined by about USD three billion last year while India's trade deficit continues to be high amounting to $56.77 billion as both countries experienced economic slowdown.
The trade figures released by the General Administration of Customs of China (GACC) on Tuesday projected the total trade in Chinese currency RMB-Yuan terms registered a marginal increase of 1.6 per cent year on year but in dollar terms it was down by about $3 billion.
GACC Vice Minister Zou Zhiwu, who released the annual trade figures to the media, said China-India bilateral trade totalled to 639.52 billion yuan (about $92.68) which is 1.6 per cent increase year on year.
China's exports to India increased by 2.1 per cent last year totalling to 515.63 billion yuan while India's imports to China decreased by 0.2 per cent totalling to 123.89 billion yuan, he said.
The trade deficit for India in 2019 was $391.74 billion yuan, he said. However, in dollar terms the trade has declined. The bilateral trade in 2018 totalled to $95.7 billion raising hopes of India-China trade touching the landmark $100 billion in 2019. But the total trade amounted to $92.68 billion last year about $3 billion less than 2018.
The Chinese exports in dollar terms to India last year amounted to $74.72 billion compared to $76.87 in 2018. India's exports to China amounted to $17.95 billion against $18.83 billion last year.
In the face of slacking trade, the trade deficit also declined from $58.04 in 2018 to $56.77 billion.
The declining trade was largely attributed to the slowdown of the economies of the two countries.
According to the figures posted on the website of the Indian Embassy here, from January to November 2019 the total trade between the two neighbours in the 11 months last year was declined by 3.72 per cent amounting to $84.32 and the trade deficit for the 11 months stood at $51.68.
Trade deficit has become a major irritant in India-China bilateral relations figuring high in the bilateral discourse. India has been demanding China to open up its IT and pharmaceutical sectors to enable it to increase its exports.
While China continue to promise to address the concerns, the two countries discussed initiatives in this regard at various levels last year.
The issue figured in the talks between Prime Minister Narendra Modi and President Xi Jinping during their 2nd informal summit at Mamallapuram in October last year where the two leaders have agreed to set up new mechanism led by Finance Minister Nirmala Sitharaman and Chinese Vice-Premier Hu Chunhua to discuss trade, investment and services.
The meeting under the new mechanism was expected to held this year. Highlighting India's concerns over the trade deficit, a note posted on the Indian Embassy here said while flourishing trade has brought with it all the advantages, it has also led to the biggest single trade deficit we are running with any country.
Our trade deficit concerns are two-pronged. One is the actual size of the deficit. Two is the fact that the imbalance has continuously been widening year after year to reach $58.04 billion in 2018," it said.
The note also said growth in bilateral investment has not kept pace with the expansion in trading volumes between the two countries.
"While both countries have emerged as top investment destinations for the rest of the world, mutual investment flows are yet to catch up. According to the Ministry of Commerce of China, Chinese investments in India between January-September 2019 were to the tune of $0.19 billion and cumulative Chinese investment in India till the end of September 2019 amounted to $5.08 billion.
Cumulative Indian investment in China until September 2019 is $0.92 billion, it said.
However, these figures do not capture investment routed through third countries like Singapore, Hong Kong, etc. especially in sectors such as start-ups etc. which has seen significant growth in Chinese investment," it said.