Worried over widening trade deficit with China which is expected to cross USD 40 billion this fiscal, the commerce ministry is in the process of preparing an export strategy identifying specific products to boost outbound shipments to the neighbouring country.
"The trade deficit with China is increasing at an alarming rate. Till now it has touched USD 32 billion and may cross USD 40 billion by end of this fiscal," an official told PTI.
In order to bridge this, the commerce ministry is formulating the strategy under which it has identified specific products including textiles, auto components, pharmaceuticals, buffalo meat, marine products, rice and other agri produces.
"These sectors have huge potential in the Chinese market.
Exports of the products would help in bridging the deficit by around USD 10 billion in a year. In these sectors, domestic players have good cost advantage," the official added.
The paper has also highlighted problems being faced by Indian exporters in these segments such as regulatory hurdles for pharma sector and sanitary and phyto-sanitary (related with plants and animals) issues for meat exports.
Besides, it has identified Chinese companies which can import these goods and Indian firms that can export.
India has already flagged these matters to the Chinese authorities and they have assured to resolve them.
As per another source, the Prime Minister Office is also taking keen interest and has asked the commerce ministry to discuss ways to increase exports to China.
"If something drastic could not be done to boost exports, it would be difficult to bridge the trade gap," sources said.
Commerce and Industry Minister Nirmala Sitharaman, in her recent meetings with Gao Yan, Vice-Minister in the Ministry of Commerce of China. expressed concern at the growing trade deficit which was USD 36 billion in 2013-14.
The Minister has said that India has global competitive advantage in niche engineering products, pharmaceuticals, cotton textiles and home furnishings.
"However these products have a limited presence in the Chinese market due to various issues related to tariff barriers, regulatory and other complexities which impede India?s exports," she has said.
Indian entities also face several regulatory hurdles and other complex domestic certification requirements to bid for government tenders and government sponsored IT projects in China.
The bilateral trade in 2013-14 stood at USD 65.9 billion.
India’s main items of export to China include petroleum products, gems and jewellery, transport equipment, other raw materials and machinery. Its imports include electrical machinery and equipment, mechanical machinery and appliances, project goods and organic chemicals.
Overall, India’s foreign trade rose over 18 times since the launch of economic liberalisation programme in 1991 while the trade deficit widened by more than 22 times.
The country’s foreign trade (export and import) has increased with an annual average growth rate of 13.42 per cent from USD 42 billion in 1990-91 to USD 765 billion in 2013-14.