Trade deficit with China tops $100bn

NEW DELHI: Despite Indian exports seeing good growth in recent months, India’s trade deficit with China has topped the $100 billion mark for the first time, with still a month left for the fiscal year to close.

Latest data released by the commerce department estimated the trade deficit during April-Feb at $102 billion, as against $91.1 billion in the corresponding period last year. For the full year, India’s trade deficit with China was just a shade under $100 billion. After the US, India has the highest trade deficit with China, with Vietnam ranked third.

While India’s exports to its neighbour have increased nearly 38% to $17.5 billion during April-Feb, imports rose over 15% on a bigger base to reach almost $120 billion.

While telecom instruments or smartphones, have seen a significant increase in exports to China — soaring almost six-fold to $2.3 billion during April-Jan (the latest period for which data is available) — oil products (133% jump to $2.1 bn) and copper items (675 to $500 million) have been among the top gainers as well. On the other hand, electrical machinery and telecom instruments have seen a sharp rise in imports, with electronic components being the top item in the goods shipped into India from across the border.

Although India has tried to set standards to guard against cheap and sub-standard imports, for several items it is dependent on China to keep manufacturing activity going. It includes components, machinery, chemicals and pharma ingredients, among others.

In contrast, China maintains tight checks including requirements for inspection and other standards that restrict the entry of Indian goods into its market despite several requests to relax the regulations.
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