New Delhi: India has to bear a deficit of more than $50 billion in the trade with China. Although, India has repeatedly raised the issue, China had chosen to ignore. But now China has acknowledged that the trade deficit with India is increasing and has promised to reduce it. It is clear that the change of heart towards India is because of its trade war brewing with the United States.
Indian Commerce and Industry Minister, Suresh Prabhu has clearly warned China that if the Indo-Chinese bilateral trade has to be increased in the future, this trade deficit will prove to be an obstacle. After this, the Chinese Commerce Ministry has promised to address the Indian concerns about this increasing trade deficit.
A high-level delegation led by Chinese Commerce Minister Zhong Shan is on India visit for the ‘Indo-China Joint Group of Economic Relations, Trade, Science and Technology’ meeting. Indian Commerce and Industry Minister Prabhu and Chinese Commerce Minister Shan had a bilateral talk on Monday wherein India raised the issue of the deficit in the bilateral trade with China.
Thinking about the future, this will not be beneficial for both the countries. Therefore, this question must be addressed, clarified Commerce Minister Prabhu in the meeting.
Commerce Minister Suresh Prabhu demanded that the Chinese market should be opened for the Indian agricultural produce. Commerce Minister also said that India was keen to enter the exports in the sectors of pharmaceuticals, medical facilities, Information technology to China. As per the reports, India has prepared a list of 250 medicines and has made a demand that the Chinese laws should be simplified for launching these medicines in China. The Commerce Ministers of India and China also reportedly discussed the free trade agreement.
There is a bilateral trade agreement of $71 billion between India and China. But India has to suffer a trade deficit of $52 billion in this. In the year 2016-17, the Chinese exports to India were to the tune of $61.3 billion whereas the Indian exports to China were a meagre $10.2 billion. India has been repeatedly bringing up this issue of the trade deficit. But China had not taken a note of it so far.
However, over the last few days the international scenario has changed rapidly. US President Donald Trump has imposed heavy taxes on the Chinese products. This has come as a major blow to China. The United States has stated that the US-China trade deficit is the highest in the history. Therefore, United States has imposed a tax of more than $50 billion on China. All the countries around the world are getting dragged into this trade war.
Against this background, China seems to have remembered the trade deficit suffered by India. China had promised to act against the trade deficit even in the past. But it had not accepted the Indian demands. It could become difficult for China to ignore the Indian demands after the sparking of the trade war with the United States.