Lok Sabha Question No. 2499 (UNSTARRED), answered on 2015-12-14
Subject: Trade with China
Ministry: COMMERCE AND INDUSTRY
Asked by: RAHUL KASWAN, KANWAR SINGH TANWAR

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

## LOK SABHA UNSTARRED QUESTION NO. 2499 TO BE ANSWERED ON 14 TH  DECEMBER, 2015

## TRADE WITH CHINA

## 2499(H). SHRI RAHUL KASWAN: SHRI KANWAR SINGH TANWAR:

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

- a) whether the Government has set any target to increase trade with China and if so, the details thereof along with the manner in which the Government proposes to achieve this target;
- b) the details of incentives proposed to be given by the Government in this regard;
- c) whether there is an increase in trade deficit with China and if so, the details thereof along  with  the  reasons  therefor  and  the  steps  taken  by  the  Government  to  end  the increasing trade deficit with China; and
- d) whether any efforts are underway to discover new aerial routes to Southern China and Tibet to encourage trade and if so, the details thereof?

## ANSWER

## वाणिज् य एवं उद्योग राज् य मंत्री )णीमीी स मलमा नीीारमि((स्वींत्र प्रभार ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

- (a):   No, Madam. Government has not set any target to increase trade with China.
- (b): Government of India has notified Foreign Trade Policy (FTP) 2015-20 which came into force on 1 st  April 2015. Under the new FTP, two scheme namely, 'Merchandise Exports from  India  Scheme'  (MEIS)    and  'Services  Exports  from  India  Scheme'  (SEIS)  have been introduced  which  provide  rewards/incentives  at  notified  rates  to  all  exporters  for export of notified goods to notified markets and to notified services. The reward rates are varying from 2-5% under MEIS and from 3-5% under SEIS. China has been placed in country Group B under MEIS. Details of the FTP 2015-20 are available at the website of the Directorate General of Foreign Trade at http://dgft@gov.in
- (c): Details of trade and trade deficit with China during the last three years and the current year are given below:-

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

Value in USD Million

| Year                      | Import    | Export    | Total Trade   | Trade Deficit   |
|---------------------------|-----------|-----------|---------------|-----------------|
| 2012-13                   | 52,248.33 | 13,534.88 | 65,783.21     | 38,713.45       |
| 2013-14                   | 51,034.62 | 14,824.36 | 65,858.98     | 36,210.26       |
| 2014-15                   | 60,409.76 | 11,935.54 | 72,345.30     | 48,474.22       |
| 2015-16 (April-Oct.)( P ) | 36,996.46 | 5,351.23  | 42,347.69     | 31,645.23       |

(P); Figures are Provisional                                                                  (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. Manufactured  items  catering  to  India's  power,  telecom,  and  other  fast  growth  sectors contribute  a  significant  proportion  towards  China's  imports  into  India.  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.

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): There is no specific proposal with Government of India to discover new aerial routes to Southern China and Tibet, at present.

*****