India offers 916 items to China to bridge trade gap.

India is literally up for sale to China to pay for its huge import bill from that country. The government has virtually offered everything from drugs and medicines to diamonds, seafood, and agricultural produce like rice and beef, textiles and light engineering goods to China to balance huge imports of branded and unbranded manufactured good from that country.

Whether China obliges, is a multi-billion dollar question. Scared by the menacing trade gap with China, the Indian government mounted a delegation of trade officials to that country in March. The officials submitted a list of 916 items to their Chinese counterparts, identifying most commodities that could be sourced from India, a commerce ministry official said.

India had piled up a trade deficit of $33.4 billion with China in the first ten months of the last financial year, according to the latest figures compiled by the commerce ministry. China exported $19.2 billion more worth of goods to India than what it imported from this country in 2009-10. In 2010-11 that gap widened to $23.8 billion.

Officials woke up to the unfolding chasm after exports to China plummeted last financial year despite India’s worldwide exports growing by 21 per cent to $303.3 billion.

Exports to China between April 2011 and January 2012 declined 5.92 per cent to $14.9 billion against $15.9 billion in the same period a year ago. Officials attributed this fall to lower Chinese consumption of iron ore and copper that account for almost half of India’s exports to that country. India exported a total of 52.47 million tonnes of these commodities between April and February last financial year against 89.72 million tonnes in 2010-11.To make up for the export shortfall, India now wants to export virtually everything to the Chinese. The commerce ministry official quoted earlier, who did not want to be identified by name, said the idea was to tap the existing list of exportable produce so that Indian trade officials did not have to wrack their brains identifying new products, nor lure Indian exporters of these goods with fresh incentives. It’s anybody’s guess if such tactics work.

“We have short listed products that are already being exported to China valued at a modest $10 million right now, while those very Indian goods are being imported in huge quantities by China from elsewhere,” the official said, citing examples of seafood and diamonds that China typically imports from its neighbouring markets.

For instance, he said, while Chinese imports of every six out of seven diamonds originated in India, a commerce ministry analysis revealed that a bulk of these were routed via Hong Kong. India exports $7 billion worth of diamonds to Hong Kong, and only around $ 1.7 billion directly to China.

Likewise, India directly exports minor quantities of seafood to China, while it suspects that huge quantities of India catch are being routed to China via Vietnam as Indian exports to that country have risen sharply in recent years. China has a free trade agreement with Vietnam and is also connected by land routes lowering logistic costs. However, the official averred that much depended on the Chinese government to balance its trade account with India as 90 per cent of China’s trade is government-controlled and driven by long-term relationships with existing partners.

Source : wrd.mydigitalfc.com