Lok Sabha Question No. 4948 (UNSTARRED), answered on 2025-04-01
Subject: Trade Deficit with USA and China
Ministry: COMMERCE AND INDUSTRY
Asked by: Thiru D M Kathir Anand

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 4948 ANSWERED ON 01/04/2025

## TRADE DEFICIT WITH USA AND CHINA

## 4948.  THIRU D M KATHIR ANAND:

Will the Minister of COMMERCE & INDUSTRY ( वाणिज्य एवं उद्योग मं त्री ) be pleased to state:

- (a) whether it is a fact that India's trade deficit with USA and China has widened as exports fell and imports rose during the last five years, if so, the details thereof;
- (b) whether  the  Government  has  taken  appropriate  measures  to  balance  India's  trade  deficit with China and USA;
- (c) whether  the  Government  has  plans  to  sign  Free  Trade  Agreement  (FTA)  with  other countries  like  USA,  UK,  Israel  and  Germany  to  reduce  the  over  dependence  on  China  for  our country's imports and if so, the details thereof; and
- (d) the  proactive  steps  taken  by  the  Government  to  reduce  the  trade  deficit  with  China  and other countries?

## ANSWER

## वाणिज्य और उद्योग मंत्रालय में राज्य मंत्री (श्री णिणिन प्रसाद) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY

## (SHRI JITIN PRASADA)

- (a) India's Goods Trade Balance with USA and China (Values in USD Million) during the last five years is as under :-

| INDIA's TRADE BALANCE   | 2019-2020   | 2020-2021   | 2021-2022   | 2022-2023   | 2023-2024   |
|-------------------------|-------------|-------------|-------------|-------------|-------------|
| With USA (Surplus)      | 17,268.90   | 22,735.05   | 32,852.94   | 27,678.73   | 35,319.54   |
| With China (Deficit)    | -48,647.99  | -44,025.10  | -73,310.78  | -83,199.66  | -85,076.85  |

Source: DGCIS

(b) & (d) So far as USA is concerned, India has maintained surplus in the merchandise trade. However, to address the overall trade deficit particularly with China, to enhance domestic supply, reduce dependency on imports and promote self-reliance, Government of India has taken several initiatives.  Under  'Make  in  India'  initiative,  the  Government  has  launched  Production  Linked Incentives  (PLI)  Schemes  in  14  critical  sectors  like  electronics,  pharmaceuticals,  white  goods, telecom  and  Networking  products,  High  efficiency  Solar  PV  modules,  etc.,  where  there  is substantial  dependency  on  imports,  to  boost  domestic  manufacturing.  The  Government  has introduced  stricter  quality  standards  and  measures  for  quality  controls,  testing  protocols,  and mandatory certification to check substandard & poor-quality products including imported products in the market and protect consumers' interest. The Government also encourages Indian business establishments  to  explore  alternative  suppliers  and  to  diversify  their  supply  chains  to  reduce dependency  on  single  sources  of  supply.  The  Government  monitors  the  surge  in  imports  on  a regular  basis  and  takes  appropriate  action.  Further,  the  Directorate  General  of  Trade  Remedies (DGTR) is empowered to recommend trade remedial actions against unfair trade practices. DGTR has initiated 129 trade remedy cases against China from April 2021 to December 2024.

(c) At present, India is engaged in negotiations with both the European Union (EU) and the United  Kingdom  (UK)  to  conclude  India-EU  and IndiaUK  FTAs,  respectively.  These negotiations  aim  to  achieve  fair,  equitable,  mutually  beneficial,  and  commercially  meaningful agreements. With regard to the European Union, of which Germany is a member, ten rounds of negotiations have been held as of March 2025 since the talks resumed in June 2022. Negotiations for the India-UK FTA, which were initially launched on 13 January 2022, were paused in May 2022  during  the  14th  round  due  to  elections  in  both  India  and  the  UK.  Subsequently,  the  two Prime Ministers met on the sidelines of the G-20 Summit in Rio de Janeiro in November 2024 and agreed to resume the talks. The Secretary of State for the Department for Business and Trade of the United Kingdom, the Rt Hon Jonathan Reynolds, visited New Delhi during 24-25 February 2025, and jointly with the Minister for Commerce and Industry, Shri Piyush Goyal, announced the formal resumption of the negotiations on 24 February 2025. As of now, Free Trade Agreement (FTA) with Israel is not under consideration. Further, with regards to USA, it has been recently agreed to by both sides to enter into negotiations for finalising a multi-sector mutually beneficially Bilateral Trade Agreement (BTA). The discussions on the same has been initiated between India and the USA.

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