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This article is more than 2 year old.

India reduces trade deficit with China by $10 billion in FY19

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India's trade deficit with China fell by $10 billion to $53 billion in FY19 on the back of lower imports, officials told CNBC-TV18. The downtick in the merchandise trade gap was also aided by new market opportunities arising out of the US-China trade war in the neighbouring nation.

India reduces trade deficit with China by $10 billion in FY19
India's trade deficit with China fell by $10 billion to $53 billion in FY19 on the back of lower imports, officials told CNBC-TV18. The downtick in the merchandise trade gap was also aided by new market opportunities arising out of the US-China trade war in the neighbouring nation.
According to a provisional figure of the year ended March 31, 2019, India's exports to China grew 31 percent at $17 billion in FY19 while imports dipped by 8 percent at $70 billion in the year under consideration.
According to sources, bigger shipments of shrimps, organic chemicals, plastic raw material, cotton yarn contributed to India’s export growth to China.
Officials in Udyog Bhawan attribute this to sustained parleys between India and China on market access of Indian goods, as well as greater demand for Indian goods in the neighbouring nation arising out of high duties on US products by China.
In fact, the Commerce Ministry had studied the impact of the US-China trade war on India and came to the conclusion that up to 603 'Made In India' goods could find greater demand in the Chinese market.
To leverage the opportunity arising out of increasing exports to China, Commerce Minister Suresh Prabhu had a meeting with government departments like textiles, steel, MSME, Ministry of IT as well as industry lobby groups like FICCI, CII and export Promotion Organisations on April 4. The minister asked the industry to identify specific goods and devise an export strategy for China in the meeting.
The ultimate objective of the latest initiative will be to eliminate trade deficit with China, official sources added.
China is India's biggest trading partner but a huge trade gap has been a cause of concern for New Delhi. At least four delegations of Indian trade diplomats have visited China since June 2018 to pitch for greater market access.
But foreign trade is not the only economic engagement that India wants to pursue. Commerce Ministry wants to aggressively pitch for investments by Chinese companies in India, which it believes are tepid at the moment. According to sources, the ministry is willing to propose investment incentives to counter attractive sops offered by South East Asian nations for Chinese companies.
An analysis by the ministry shows that Xiaomi, Shunwei Capital, Alibaba, Ant Financial, FinUp Finance Tech Group are the top 5 Chinese investors in Indian start-ups and most of the investments have gone into the ecommerce sector, followed by lending, social media and investment.
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