India’s exports to China surge, yet Delhi lens on Beijing’s market-access promise

Amiti Sen | | Updated on: Dec 06, 2021

China’s promise to check the widening trade imbalance with India by importing more may already be showing some impact. India’s exports to China in the first eight months of FY19 increased by more than a third year-on-year, according to official figures.

India, however, is closely monitoring the export figures to see what part is directly attributable to the greater market access promised by Beijing, so that corrective action can be sought, if required, a government official told BusinessLine.

“The Commerce Ministry and the Ministry of External Affairs are coordinating their efforts to ensure that China delivers on its market-access promise. India will have to shape its diplomatic strategy accordingly,” the official said.

India’s exports to China in the April-November 2018 period increased 36.87 per cent to $11.1 billion while its imports from that country in the same period declined 2.66 per cent to $48.35 billion.

In FY18, exports to China had risen 31 per cent to $13.33 billion while imports were up just 24.64 per cent at $76.38 billion, which increased the trade deficit to a whopping $63 billion.

Much more possible

“We understand it would be difficult to make a big dent in the trade deficit numbers. But if China is sincere about removing non-tariff barriers, there is vast scope for increasing imports from India, especially with the ongoing US-China trade war,” the official said.

“The retaliatory tariffs placed by the US and China open a window of opportunity to enhance India’s exports to China and the US, particularly in products where India is competitive,” Minister of State for Commerce & Industry CR Chaudhary recently said in a reply to the Rajya Sabha.

For a number of items that it has been buying in large quantities from the US, such as soyabean and tobacco, China is taking steps to open imports from India.

Items for which it has already removed import restrictions from India include non-basmati rice, sugar and some pharmaceutical products. Many others are in the pipeline, such as rapeseed, bananas, soya, oilmeal, groundnut and buffalo meat.

“The problem is that even when China says it will allow imports of particular items, the going is not smooth as they operate on quotas. How well the quota system will work for our exports has to be seen,” the official said.

Published on January 04, 2019
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