India’s trade deficit with China mounted to a whopping USD 46.56 billion last year as Indian exports continued to decline while the bilateral trade marginally slowed down by 2.1 per cent to nearly USD 71 billion.
The total India-China bilateral trade in 2016 amounted to USD 70.8 billion, a decline of 2.1 per cent as per the trade figures released by General Administration of Customs (GAC).
China exports totaled to USD 58.33 billion, registering an increase of 0.2 per cent compared to USD 58.25 billion in 2015, as GAC data accessed by PTI.
While it is not clear yet the areas of decline in India’s exports as detailed data is not released yet, officials say it reflected on the continuing declining trend in the last few years.
The exports from India to China pegged down at USD 11.76 billion, about 12 per cent decline compared to 2015.
The Indian exports showed the declining trend for a while as they totaled to USD 13.38 billion in 2015 and USD 16.4 billion in 2014. In 2016, the trade deficit was USD 12.46 billion.
The overall trade between the two countries in 2015 touched USD 71.64 registering a marginal increase compared to USD 70.59 in 2014. The trade deficit has mounted to USD 46.56 billion in 2016 from USD 44.87 billion in 2015 as per the data from Chinese customs.
However, there is considerable differences between India and China trade figures as Commerce Minister Nirmala Sitharaman told Lok Sabha on November 28 last year that India’s trade deficit with China increased to USD 52.69 billion in 2015-16 from USD 48.48 billion in the previous financial year.
“Increasing trade deficit with China can be attributed primarily to the fact that Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors like telecom and power,” she had said.Generally the Indian exports have been declining due to fall in the iron ore and decreasing demand in view of China’s slowdown as well as restrictions on exports.
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Generally the Indian exports have been declining due to fall in the iron ore and decreasing demand in view of China’s slowdown as well as restrictions on exports.
Also, the impact of the appreciation of the dollar on yuan and rupee in both the counties is yet to be seen. Yuan has declined by about 8 per cent last year. Officials say despite promises by the Chinese government not much openings to the Indian industries have been provided so far.
In view of the continued deficit problem, India has been insisting on China to step up investments in ‘Make in India’ initiative and other infrastructure projects to compensate India’s trade deficit. Chinese officials say China’s investments over the years in India has climbed to USD four billion.
But according to official data, the Chinese investments in India in 2015 was about USD 800 million.But at the same time officials of both the countries say that there is lot of interest among Chinese investors and the investments in India are expected to pick up this year.