Economy Aug 17, 2012
Worried over widening trade deficit with China, India said it will take steps to bridge the imbalance with the neighbouring country.
The trade deficit between the two countries reached over $40 billion in 2011. "China is one of the largest trading partners (of India), but at the same time there is issue of adverse balance of trade...We will look at steps that are required to be taken so that the trade remains healthy and becomes more balanced," Commerce and Industry Minister Anand Sharma said.
He was talking to reporters on the sidelines of 'Hastkala' function. The minister said he would discuss the ballooning trade gap and other trade related matters with his Chinese counterpart Chen Deming during his forthcoming visit to India.
"...all the bilateral issues (will be discussed). China is important as it is a strategic partner of India," he said. The two countries are set to discuss trade-related issues during a meeting of a Joint Economic Group (JEG) headed by the Commerce Ministers of both the nations in New Delhi on 27 August.
Chinese Commerce Minister Chen Deming would arrive in New Delhi on a two-day visit on 26 August.
India's main items of export to China include petroleum products, gems and jewellery, transport equipment, other raw materials and machinery.
India's imports include electrical machinery and equipment, mechanical machinery and appliances, project goods and organic chemicals. The issue of trade surplus being in favour of China has been taken up by the Indian government with the Chinese authorities earlier as well.
In 2011, the bilateral trade had stood at over $75 billion, of which India's export to China was only $17.9 billion and import $57.6 billion. On relaxing foreign direct investment (FDI) norms in pharmaceutical sector, Sharma said, "There is an inter-ministerial committee which is looking at these issues and this will get resolved soon".
There were differences on the issue between Finance Ministry and the Department of Industrial Policy and Promotion (DIPP). While the Finance Ministry favours capping FDI in the pharma sector to 49 percent in existing units, the DIPP has been advocating 100 percent FDI through the Foreign Investment Promotion Board (FIPB) route in such cases.
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