China Should Increase Imports from India: FIEO.

Singapore, (PTI) Indian exporters today called for China to step up imports from its neighbour, as well as reduce high tariffs on specific products, to bridge the widening trade gap between the two Asian giants.

India''s trade deficit with China is widening, but the Chinese authorities are not opening up the market to Indian pharmaceuticals and other products. Beijing maintains high import tariffs on Indian goods, especially hand-made carpets and handicrafts, Federation of Indian Export Organisations (FIEO) Secretary General G P Upadhyaya told PTI here.

In 2009-10, the trade deficit between the two countries stood at about USD 20 billion. While India''s exports to its neighbour stood at USD 11.61 billion in 2009-10, its imports amounted to USD 30.82 billion.

"The Chinese have been made aware of the increasing trade deficit and its impact on the Indian economy, but they have taken a slower approach, especially (in) opening new business areas to the Indian expertise," Upadhyaya said after addressing a roundtable talk at the Lee Kuan Yew School of Public Policy here.

"Both India and China are huge markets and will need to maintain balanced trade, given that India''s total merchandise trade deficit is projected to reach USD 120 billion this year, the maximum tolerable for the country," he said.

India''s total merchandise trade deficit last year was about USD 110 billion.

Upadhyaya called on China to import more Indian engineering, automobile and auto part products and open up its market to Indian pharmaceuticals, fruits, vegetables, processed food, IT and IT-enabled services.

"China has opened its health sector to global investors and should allow the internationally rated Indian hospital groups to invest in the sector," he said.

China is set to become India''s largest trading partner in the current fiscal, with trade pegged at USD 60 billion, up from USD 42 billion a year ago. This would reduce the United Arab Emirates to being India''s second-biggest trading partner.

However, it should be noted that while trade between India and the UAE in the 2009-10 fiscal amounted to USD 48 billion, this was balanced trade with the flow of USD 24 billion in both ways.

The secretary general also highlighted the Indian government''s plans to diversify into newer export markets to balance the trade deficit.

Indian companies and investors are being encouraged to invest in newly emerging markets, especially in Africa and Latin America.

India''s major exports to China include iron ore, cotton and organic chemicals, while its imports include steel, steel products and electrical machines.

Source : news.in.msn.com