Lok Sabha Question No. 5 (STARRED), answered on 2016-04-25
Subject: Trade Deficit with China
Ministry: COMMERCE AND INDUSTRY
Asked by: Dr. BHOLA SINGH

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

## LOK SABHA STARRED QUESTION NO. 5 TO BE ANSWERED ON 25 th  APRIL, 2016

## TRADE DEFICIT WITH CHINA

## *5.     DR. BHOLA SINGH:

Will the Minister of COMMERCE & INDUSTRY ( वािणÏय एवं उɮयोग मंत्री ) be pleased to state:

- (a) the  details  of  India's  trade  with  China  during  each  of  the  last  three  years  and  the current year;
- (b) whether India's Trade Deficit with China has widened during the said period and if so, the details thereof and the reasons therefor;
- (c) whether the Government proposes to bridge the widening trade gap with China by adopting new strategies; and
- (d) if  so,  the  details  thereof  along  with  the  steps  taken/proposed  to  be  taken  by  the Government in this regard?

## ANSWER

वािणÏ य एवं उɮयोग राÏ य मंत्री ) Įीमती िनमर्ला सीतारमण ( ( èवतंत्र प्रभार )

THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY

(INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

a) to  d):   A Statement is laid on the Table of the House.

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF LOK SABHA STARRED QUESTION NO.  5  FOR ANSWER ON 25 TH  APRIL, 2016 REGARDING 'TRADE DEFICIT WITH CHINA '

- (a):    Details of the merchandise  imports, exports and the trade deficit with China during the last three years and the current year upto February 2016 are given below:-

## Bilateral Trade between India and China 2012-13 to 2014-15 and the current year

Value in US$ Billion

| Year                          |   Import |   Export |   Total Trade |   Trade Deficit |
|-------------------------------|----------|----------|---------------|-----------------|
| 2012-13                       |    52.25 |    13.58 |         65.83 |           38.67 |
| 2013-14                       |    51.04 |    14.87 |         65.91 |           36.17 |
| 2014-15                       |    60.41 |    11.96 |         72.37 |           48.45 |
| 2015-16 (April- February) (P) |    56.93 |     8.25 |         65.18 |           48.68 |

(P): Provisional(Source; DGCI&S)

- (b): During  the  said  period  India's  trade  deficit  with  China  increased  from  US$  38.67 billion in 2012-13 to US$ 48.45 billion in 2014-15.For the period April-February 2015-16the trade deficit increased to US$ 48.68 billion

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,  while  India's  exports  to  China  are  characterized  by  primary  and intermediate  products.  The  major  imports  from  China  are  products  such  as  telecom instruments, computer hardware and peripherals, fertilizers,electronic components/instruments, project goods, organic chemicals and drug intermediates, consumer electronics, electrical machinery and equipments, iron and steel etc. These imports feed the growing demand in India for such goodswhich China, due to variety of reasons, is able to export to India at competitive prices.

(c)& (d): Ministry of Commerce of the People's Republic of China and Ministry of Commerce & Industry of the Republic of India jointly developed and signed in September 2014 the Five -Year Development Program for Economic and Trade Cooperation in order to lay down a medium term roadmap for promoting balanced and sustainable development of economic and trade relations between China and India, on the principle of equality and mutual benefit.

The Five Year Program recognizes and states 'that trade deficit with China is a matter of high concern for India. Against this background and in the spirit of mutual benefit, India and China shall endeavour to strengthen cooperation and gradually achieve bilateral trade balance over the next 5 years. India and China shall further endeavour to increase bilateral trade in services particularly Information Technology (IT) & Information Technology Enabled Services (ITES) in the next 5 years.'

A Joint Working Group (JWG) on Information Technology (IT) has been constituted under the  MoU  between  the  Ministry  of  Communications  and  Information  Technology  of  the Republic  of  India  and  Ministry  of  Industry  &  Information  Technology  of  the  People's Republic  of  China  on  co-operation  in  the  field  of    Information  and  Communication Technology. The first meeting of this JWG was held on 15 th -16 th December, 2014 where two countries deliberated to further promote Indian IT and ITES exports to China.

Efforts  are  being  made  to  increase  overall  exports  by  diversifying    the  trade  basket  with emphasis on manufactured goods, services,  resolution of   market access issues and  other non-tariff barriers. This is done through bilateral meetings and institutional dialogues. Indian exporters are encouraged to participate in major trade fairs in China and other countries to show-case Indian products.

The Government has also taken various measures to extend support to exporters  including to China which are indicated below:

i. The New Foreign Trade Policy (2015 -20) was announced on 1 st April, 2015 with a focus on  supporting both manufacturing and services exports and improving the 'Ease of Doing Business'. The FTP introduced two new schemes, namely, 'Merchandise Exports from India Scheme' (MEIS) for incentivising export of specified goods to specified markets and 'Service Exports from India Scheme' (SEIS) for promoting export of notified services from India, by consolidating earlier schemes.

ii. In the light of the major challenges being faced by Indian exporters in the backdrop of the global economic slowdown, the envisaged revenue outgo under MEIS was increased from Rs. 18000 Crore to Rs. 21000 Crore in October 2015 with accompanying enhancement in benefits on certain products and inclusion of certain additional items.

iii.  By  way  of  trade  facilitation  and  enhancing  the  ease  of  doing  business  Government  has reduced  the  number  of  mandatory  documents  required  for  exports  and  imports.  The  trade community can file applications online for various trade related schemes.

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