The Hindu Business Line : Discrepancies in trade with China

IT is well known in certain circles that there is a mismatch between the amount that India exported to China and the amount that China reports as having been imported. And vice-versa.

In recent years, these discrepancies have varied from less than half to as much as three-fourths of a billion dollar, on total two-way trade varying between $2 billion and $7.6 billion.

Such discrepancies are so common that the International Trade Statistics put out by the UNCTAD jointly with the WTO routinely include tables on discrepancies between figures put out by exporting/importing countries and the `mirror estimates' of these amounts as shown by trade partners.

Similar statistics are also put out for export and import of products.

Discrepancies in product rather than country figures have more important implications. Because they typically account for a much larger share of the total sum.

A few billions here and there, on total two-way trade turnover running into a hundred billion dollars, does not really make much of an impression.

One need not be too uneasy about it.

For particular products, however, even small discrepancies in absolute terms can account for a much greater proportion of two-way trade in that product.

Besides, these discrepancies can more easily, and more usefully, be tracked down.

For the year 2003, product discrepancy tables are available for 47 (mirror estimate 43) out of total imports of about $77 billion reported by India.

As for exports, the data cover all exports reported by India, i.e. $44 billion.

The mirror estimate, $52 billion, is much higher.

Discrepancies in data on imports and exports of gems and jewellery are particularly worth mention. Imports of diamonds (not mounted or set) and gold (unwrought or in semi-manufactured form) are reported at $5.6 billion and $5.3 billion, respectively.

These two items thus constitute more than 14 per cent of the total imports reported by India for 2003.

The mirror estimates are $6 billion and $0.8 billion respectively for diamonds and gold.

No doubt, part of the discrepancy for gold is because it is brought into India as hand baggage, which would presumably show up in mirror countries as domestic purchases rather than exports.

Given the lack of data, whether this factor by itself can account for the $4.5-billion difference is a matter of opinion.

On the export side, the largest single item, diamonds (not mounted or set) accounts for $4.9 billion of total exports of $44.7 billion; i.e. a little under 10 per cent. The mirror estimate, at $5.6 billion was $0.7 billion higher.

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