NEW DELHI: China on Wednesday announced that it would reduce or cancel tariffs on imports of 8,549 types of goods from India and four other nations to help reduce the trade imbalance.
“China will reduce or cancel tariffs on imports of 8,549 types of goods from India, South Korea, Bangladesh, Laos & Sri Lanka. The goods include chemicals, agricultural & medical products, soybean, clothing, steel & aluminum products. Good news to help reduce trade imbalance,” tweeted China’s ambassador to India Luo Zhaohui on Wednesday afternoon.
According to a country wrap report released by SBI earlier this month, India’s trade deficit with China expanded from from $38.72 billion in FY13 to $51.11 billion in FY17, and further to $62.94 billion in FY18.
According to the report, rising imports has made China India’s largest trade partner. In terms of exports, India’s top trading partner is the US, to which it exported $42 billion in FY17 as compared to only $10 billion to China. “Trade between India and China has experienced a slowdown in the past few years. Structural transformation of China led to decline in demand for our exports,” the report said.
This huge gap was among the issues raised during Prime Minister Narendra Modi’s ‘informal’ summit with China’s president Xi Jinping in late April. Subsequently, after the Shanghai Cooperation Organisation summit June 9-10 in Qingdao, Foreign Secretary Vijay Gokhale said China was looking at enhancing agricultural exports from India including non-Basmati rice and sugar. China has also agreed to encourage India's pharmaceutical companies to register for high quality pharma products in its market. This is an important development as India has been pressing for greater pharma exports into China, he said.
Although there has been a decline in China’s import of goods from India, certain items like ores, cotton, organic chemicals mineral fuels copper, iron and steel, nuclear reactor and mechanical appliances, electrical machinery and plastic are still there in the list of top export items from India to China, the SBI report said.