India Concerned Over Widening Trade Deficit Of $58 Billion With China

India on Wednesday expressed concern over widening trade deficit with China which has ballooned to over USD 58 billion, with the country's new envoy in Beijing saying that addressing the issue would be his top priority.

India's Ambassador to China Vikram Misri, who assumed charge on January 8 at a time when the two Asian giants were trying to boost their bilateral ties, told the state-run Global Times that India is working with the Chinese side for ensuring greater market access to the Indian agricultural products.

He expressed concern over growing trade deficit, which has now crossed over USD 58 billion in over USD 80 billion trade.

The bilateral trade will cross the USD 100 billion mark this year, he said.

"However, this figure includes a deficit of USD 58 billion for India and this deficit has been increasing over the years. Addressing this trade deficit would be one of my priorities because it is not really sustainable in the long term," Mr Misri said.

India is working with the Chinese side for ensuring greater market access to the Indian agricultural products such as sugar and rice, as well as various fruits and vegetables, besides pharmaceuticals and IT, which are India's strengths, he said.

The Indian envoy's interview was carried by the daily on Wednesday.

"Progress has been made in some of these areas but translating this progress into actual and sustained exports is important. We hope that in this regard, we will receive support from the Chinese side and expand our trade basket. In addition, we also need to address the barriers for greater access to the Indian pharmaceuticals and IT products and services in the Chinese market," Mr Misri said.

He said that the growth in bilateral investments has not kept pace with the expanding trade volume between the two countries. While both countries have emerged as top investment destinations for the rest of the world, mutual investment growth is yet to catch up.

"Many of the Chinese companies are doing good business in India. Xiaomi and other Chinese companies are among the largest distributors of mobile phones in India. We welcome these companies to set up their manufacturing bases in India, which would contribute to lowering the trade deficit. We would also like to see more Chinese investment in infrastructure, such as roads and railways, industrial parks and in the food processing sector," Mr Misri said.

The India-China bilateral trade reached USD 84.44 billion in 2017.

According to India's trade figures, the bilateral trade deficit crossed USD 52 billion in 2017. India has been pressing China to open the IT and Pharmaceutical sectors for Indian firms to reduce the massive trade deficit.

Mr Misri said another welcome area for the Chinese investment would be the hospitality sector, such as restaurants that cater to the Chinese palate, which in turn would be an attractive factor for Chinese tourists.

He said that enhancing people-to-people and cultural contacts would be another focus area.

"In 2018, the total number of travellers from China to India and vice versa added up to just one million, which is a minuscule number when we consider that our combined population is 2.6 billion," he said.

"We need to change these figures and promote our countries as preferred tourist destinations for each other. This would be the best way to enhance trust and understanding between our two peoples and further strengthen our overall bilateral relationship," he said, adding that 2020 will mark the 70th anniversary of the establishment of diplomatic relations between India and China and people's exchanges would be an important component of the celebrations.

Mr Mirsi said that one of the main reasons for the low number of Chinese tourists visiting India could simply be lack of information.

"We are taking energetic steps to bridge this information gap and China has been identified by us as a priority market for India's tourism promotion. India promises an unparalleled experience for Chinese tourists as it can provide a mix of heritage, adventure, wellness, medical and spiritual experiences," he said.

Mr Misri said that the third focus area for him would be to promote cooperation between India and China in regional and global affairs.

"As the two large and developing economies of Asia, India and China share common concerns and positions on many issues of regional and global importance such as climate change, energy security, counter-terrorism and the international trading system. We would like to further strengthen our cooperation in all these areas," he said.

Mr Misri also played down concern over India-China competition in South Asia.

"I do not think that there is really any confrontation between India and China in the South Asian region. We are both large countries with several important relationships in the region and both of us bring unique contributions to each relationship," he said.

India's leaders have long felt that there is enough room for both India and China to grow and achieve their objectives together, Mr Misri said.

"As the two large neighbouring countries which share a long border, it is inevitable for our relationship to have elements of both cooperation and competition. But competition does not necessarily translate into confrontation and in fact healthy competition can lead to further development of the region. If we consider this issue at a pragmatic level, we will find that elements of cooperation far outweigh elements of competition between us," the Indian envoy added.