India –China bilateral trade hit a record $73.9 billion last year, but the ballooning trade deficit in Beijing favour rose to over $27 billion, raising concern among Indian authorities.
The bilateral trade registered a $12.2 billion increase in 2011, taking the total to $73.9 billion against $61.7 billion in 2010, according to official trade figure for the last year.
The trade deficit in 2011, however, piled up to $27.07 billion even though Indian export to China went up to $23.4 billion registering a growth of almost 12.26 percent compared to the same period in year 2010.
“The overall trade figure looks good but the deficit remains a cause for concern,” Indian Ambassador to China S. Jaishankar told PTI.
He said efforts are being made to improve market access for Indian products in China.
“We have some early signs of movements in access to the Indian IT products. But these are early days,” he said, referring to various campaigns organized by the Indian Embassy to push IT and Pharmaceutical export to China.
Most important thing is that the bilateral trade is growing well despite the global economic downturn, he said.
Chinese officials have been acknowledging India’s concerns over trade deficit and the issue was expected to figure in details in India –China Trade Ministers talks during the BRICS Commerce Meeting on March 28th in New Delhi.
The Indian exports, mainly composed of primary products and commodity sector, increased despite the decline of iron ore export, which dominated exports to China for long due to ban on mining in Karnataka and Goa, said K. Nagraj Naidu, head of the economic and trade wing of the Indian Embassy.
Chinese exports to India continue to surge crossing the $50 billion mark. The export logged $50.04 billion registering a growth of 23.51 percent over 2010.
The share of India –China bilateral trade in China’s overall trade increased to about 3.8 percent compared to 2.06 percent in 2010.
Naidu said India’s export to ores, slag and ash to China have dropped by 11 percent to $10.45 billion in 2011.
Iron ore which has traditionally been the top item of export has dropped by 14% to $9.6 billion in 2011 compared to the $11.2 billion export in 2010.
The share of iron ore in the basket of Indian export to china has dropped by 41% in 2011 compared to 54% in 2010 and 55% in 2009, he said.
The drop in iron ore export could be attributed to the ban on mining in Karnataka, illegal mining in Goa, restriction on iron ore truck movements in orrisa.
Also the other reason could be that China is diversifying its spot iron ore purchase away from India, largely in favour of South Africa, Naidu Said.
While India’s concerns over trade deficit remained, Indian officials say that there are encouraging sign about Chinese investment in India even though figures are not available as most of the investments are coming through Singapore and Mauritius.
The high volumes of Chinese trade in India is also focused on infrastructure development specially, telecom and energy generation equipment.
Over all trade and investment appears to emerging as a strong binding force for the bilateral ties, according to the officials.
India’s items of export which have seen positive growth rates include, copper ($2 billion), precious stones ($1.1 billion), organic chemicals ($999 million), slat, sulphur, earth, stone ($514 million) and machinery ($478 million).
Under machinery, India’s principal export to China included diesel machine, worth $47 million and crank shafts worth $32 million, India is China’s 16th largest source of imports.
http://www.ndtv.com/article/profit/india-china-trade-hits-all-time-high-of-73-9-billion-in-2011-296742