Narendra Modi in China: This will be the second visit by Prime Minister Narendra Modi to China in last six week, and certainly there’s a lot on the table to discuss — from global action against terror networks to boosting trade. Narendra Modi is on a two-day visit to China to attend the Shanghai Cooperation Organisation or SCO summit beginning Saturday. But what’s being talked about is India’s IT and pharmaceutical sectors. Reason: Trade imbalance between India and China.
As there are concerns over the large deficit in bilateral trade with China, analysts and even Gautam Bambawale, an Indian envoy in China say that exports from India’s IT and pharmaceutical sectors could help bring down the trade imbalance. India has been asking China to open its IT and pharmaceutical sectors to address the trade deficit which climbed to over $51 billion in 2017. “There are some non-tariff barriers in China which need to be removed for this to happen,” Gautam Bambawale said.
An SBI report released last week said that India should try to tap sectors such as pharmaceuticals and agriculture — particularly in commodities like rice — in the Chinese market with an aim to bridge the widening trade gap. Once India is able to tap those (agriculture and pharma) markets and increase its exports, the trade deficit will be quite balanced. In FY17, India’s trade deficit with China expanded to $51.11 billion from $38.72 billion in FY13.
In addition, data showed that the trade deficit further widened to $62.94 billion in FY18. While India is looking to export more, China is looking to import more. Amid fears of trade war under the protectionist policy of US President Donald Trump, China is planning to hold its first import-only fair later this year.
Through this fair, the dragon is projecting the Chinese market as a “historic opportunity for enterprises” to tap the enormous potential for the growth of consumption and import. China expects businesses from over 100 countries — including India. Last month, India made a great stride towards pushing India’s pharma products in China as the dragon removed import duties on as many as 28 medicines, including all cancer drugs, from May 1.