Lok Sabha Question No. 2703 (UNSTARRED), answered on 2016-03-14
Subject: Trade Deficit with China
Ministry: COMMERCE AND INDUSTRY
Asked by: SUDHEER GUPTA, KAVITHA KALVAKUNTLA, ASHOK SHANKARRAO CHAVAN, NANABHAU FALGUNRAO PATOLE, KUNWAR HARIBANSH SINGH

## GOVERNMENT OF INDIA

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

## LOK SABHA UNSTARRED QUESTION NO. 2703 TO BE ANSWERED ON 14 TH  MARCH, 2016

## TRADE DEFICIT WITH CHINA

## 2703. SHRI SUDHEER GUPTA:

## SHRIMATI KAVITHA KALVAKUNTLA: SHRI ASHOK SHANKARRAO CHAVAN:

SHRI NANA PATOLE:

KUNWAR HARIBANSH SINGH:

Will  the  Minister  of COMMERCE & INDUSTRY ( वा�णज्य ववय उ््ययगवमं ) be pleased to state:

- (a) whether India's trade deficit with China has hit $45 billion with bilateral trade remaining far below the ambitious $ 100 billion mark set for 2015 by two countries;
- (b) if so, the details thereof and the reasons therefor;
- (c) the corrective steps taken by the Government to reduce the trade deficit with China; and
- (d) the  other  steps  taken/being  taken  by  the  Government  to  reduce  overall  trade  deficit  by boosting exports of the country?

## ANSWER

## ययययययययवा�णज्यय ववय उ््ययराज्oयगवमं ) य(शंगींयी गनमलंीारगण (सवीवमय्रार ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

(a) & (b):    India's trade deficit with China stood at US$ 51.86 billion with bilateral trade of US$ 71.22 billion  in  2015.  During  this  period,  India's  export  to  China  was  US$  9.68  billion while imports from China stood at US$ 61.54 billion (Source: DGCI&S).

Increasing trade deficit with China can primarily be attributed to the fact that Chinese exports to India  rely  strongly  on  manufactured  items  meeting  the  demand  of  fast  expanding  sectors  like telecom and power while India's exports to China are characterized by primary products, raw material  and  intermediate  products.  Other  major  imports  are  of  products  such  as  computer hardware  and  peripherals,  bulk  drugs  and  drug  intermediates,  project  goods,  fertilizers  and chemicals, consumer electronics, iron and steel and products thereof etc. These imports feed the growing demand in India for such goods which China, due to variety of reasons, is able to export to India at competitive prices.

(c ): 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 '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.'

(d): Efforts are being made to increaseoverall exports by diversifying  the trade basket with emphasis on manufactured goods, services,  resolution of   market access issues and  other nontariff  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 showcase Indian products.

The  Government  has  also  taken  various  measures  to  extend  support  to  exporters  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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