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Finance and Commerce Ministries Join Hands to Fight China, Trade Deficit

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New Delhi: In the words of the Parliamentary Standing Committee on Commerce, Chinese imports have “thrown a spanner in the wheel” of India’s economic progress. Taking cognizance of the trade deficit, commerce and finance ministries have teamed up to form a committee to resolve the hurdle.

Senior officials in the ministry of commerce informed that the committee comprises senior officials who will draw up a list in order to scrutinize and lessen imports.

The delegation will be exploring opportunities for export of soya, sugar and non-basmati rice to China.
India’s trade deficit with China surged from $ 38.72 billion in 2012-13 to $ 51.11 billion in 2016-17 and further to $ 62.94 in 2017-18. On the other hand, India’s exports to China in 2017-18 amounted to $ 13.3 billion, while its imports from the neighbouring country approximated to $ 76 billion.

In relation to the same, India had cautioned China at the World Trade Organization that its $ 63 billion trade deficit with the country was unsustainable and mere lip-service to bridge the gap was not enough.

In its statement during China’s trade policy review at the WTO, New Delhi pointed out that Beijing needed to make serious efforts to lower trade barriers for rice, meat, pharmaceuticals and IT products from India to make a difference to the trade imbalance.

Citing complex requirements for participating in contracts of Chinese state-owned enterprises (SOE) and issues related to qualification requirements, licensing and taxation, Delhi has sought transparency in export of agriculture products, including bovine meat and providing services such as IT. However, all is not dim for India’s relations with China.

China is preparing to give swift regulatory approvals to India-manufactured drugs, the head of an Indian export promotion group said, as Beijing looks for new commercial partners ahead of what could be a protracted trade war with the United States.

Indian firms are looking to fill gaps in Chinese demand for generic drugs, software, sugar and some varieties of rice, trade officials in New Delhi said.

“We do feel that China is receptive at this time and it’s all about making prices competitive,” a government official involved in the effort to promote trade with China told Reuters.

No concrete deals have been signed but the outlook for pharmaceutical sales from India is positive, according to officials from both nations.

India dominates the world’s generic drugs market, exporting USD 17.3 billion of drugs in the 2017-18 (April-March) year, including to the United States and the EU. But only 1 percent of that went to China, the world’s second-largest market for pharmaceuticals, industry data shows.