China’s restrictions on Indian exports have emerged as the biggest obstacle to bilateral trade, widening India’s trade deficit despite an improvement in diplomatic relations between the two countries in recent times, finance minister Nirmala Sitharaman said on Friday.
During her interaction with the Atlantic Council on the sidelines of the International Monetary Fund meeting in Bangkok, Sitharaman flagged China’s extensive use of non-tariff barriers, which she said had prevented Indian exporters from accessing the Chinese market despite significant opportunities.
“I would think a decade has gone, consistently putting up a case for market access for Indian products. But non-tariff barriers have been very strong and China uses non-tariff barriers unhesitatingly, whether it is in the name of phytosanitary measures or any other for which due investigations can happen. Both sides can resolve the issues by talks. But no progress has been made. So, non-tariff barriers are the biggest hurdle in the trade between India and China,” the minister said.
India has recently relaxed Press Note 3 norms, which had restricted Chinese entities from making foreign direct investment in India through the automatic route. However, the widening trade gap remains a key concern, with imports from China continuing to far exceed exports.
According to the latest government data, India’s imports from China rose nearly 28% to $80.35 billion during April-September this year, while exports stood at $11.41 billion.
India’s trade deficit with China more than doubled to $112 billion in FY26 from $52.7 billion in FY16.
“The trade imbalance is something which we have been talking with China now for several years; we are denied market access even for those goods for which there are immense market opportunities in China,” Sitharaman said.
She said the two countries could address concerns over non-tariff measures through dialogue and investigations, but there had been little progress. New Delhi, meanwhile, had refrained from imposing retaliatory non-tariff restrictions or countervailing duties on Chinese goods.
On the India-US trade negotiations, Sitharaman expressed hope that the agreement would be concluded soon.
“I hope in the interest of global trade and in the interest of trade between the two partners India and US the trade agreement gets concluded at the earliest,” she said.