As per Chinese official date released to media on Tuesday, China-India bilateral trade stood at 639.52 billion yuan in 2019 which is 1.6 per cent increase year on year. However in US dollar terms, it has dipped by 3 billion US dollars as compared to 2018 as overall global trade was moderated in 2019. Bilateral trade is projected to be about 92.68 billion dollars in 2019 while it was 95.7 billion US dollars in 2018, a record high till now. India’s Trade deficit with China also declined to about USD 56.77 billion in 2019 as compared to about 58 billion USD in 2018.
Vice Minister Zou Zhiwu of General Administration of Customs of China told Prasar Bharati Special Correspondent that China’s exports to India was 515.63 billion yuan (about USD 74.72 billion) in 2019, an increase of 2.1 % and China’s import from India was 123.89 billion yuan (about USD 17.95 billion), a decrease of 0.2%. Responding to the question on large trade deficit of India, he said China welcomes more high quality products from India to big chinese market. Zou added that informal summit between Prime Minister Narendra Modi and President Xi Jinping last year created momentum for the growth of bilateral relations and bilateral trade will contribute to the growth of bilateral relations.
He said China believes that deepening economic and trade cooperation between the two countries will make our bilateral trade more healthy and balanced. Trade deficit has become a major concern in India-China bilateral relations. It is India’s biggest single trade deficit running with any country. India’s trade deficit is two-pronged, the sheer size of the deficit and its continuous widening year after year to reach USD 58.04 billion in 2018. During second informal summit in Chennai last year 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, first meeting of which is expected to take place this year.
The growth of trade deficit with China is mainly due to two factors: a narrow basket of commodities, mostly primary, that India exports to China and market access impediments for most of Indian agricultural products and its competitive sectors, such as pharmaceuticals, IT/ITeS, etc. India has been pitching for more market access to Indian IT companies, pharmaceuticals and agriculture products, including major commodities like sugar, rice, milk and milk products. India, being a large producer of these commodities can emerge as a most stable and cost effective source for China.
Two countries have discussed initiatives in this regard at various levels in last two years.
Since Wuhan Summit, Export of Indian marine products have seen a ten fold growth touching 1 billion USD in 2019 while agriculture products such as non basmati rice, rapeseed meals, fish meals, tobacco leaves, etc have gained access to Chinese markets. India has also requested China to expedite market access for other products like okra, soya bean, bovine meat and dairy products.