| Date: |
25-04-2015 |
| Subject: |
PM Narendra Modi to pitch for narrowing of trade deficit with China |
|
NEW DELHI: For Prime Minister Narendra Modi, India's bulging trade deficit will be one of the top issues to take up with Chinese leadership when he visits Beijing next month. He is expected to propose measures to narrow the gap that is disproportionally skewed towards the neighbor.
Commerce Secretary Rajeev Kher said the PM will make a strong pitch to reduce the deficit because "if there is a future for India-China bilateral trade relationship, then this issue needs to be sorted out."
The trade deficit between India and China widened to $40 billion in 2014-15 and could reach $60 billion in the next five years if the issue is left unaddressed, show estimates from the Commerce Department's estimates.
Speaking on the sidelines of a session during the three-day Global Exhibition in Services here, Kher said the approach to narrow the deficit required a three-pronged strategy: seeking effective market access from China in specific areas of India's strength, channeling Chinese investment into Indian manufacturing and jointly investing in third countries.
"We need to encourage Indian Industry to enter those sectors where Chinese manufacturing is on the decline and where we can cater to their market. Also, we can see how to channel Chinese investment into India to reduce imports and ensure transfer of technology and capacities to India," Kher said while speaking at the session, 'Accelerating Indo-China Economic Engagement'.
The exhibition is being organised jointly by the Department of Commerce, Confederation of Indian Industry and the Services Export Promotion Council.
The government is trying to address specific market access issues in sectors of interest to India, such as drugs and pharmaceuticals; information technology and related services; agriculture and food processing; and auto components, the secretary said.
While stressing that boosting exports alone would not be sufficient to bridge the wide trade deficit, Kher said India needed to see where China and India could make a joint entry into third markets, such as Africa or Latin America.
The government is also seeking duty reduction from China under Asia Pacific Trade Agreement, especially in textiles and garments.
He said the government is setting up a special purpose vehicle to promote investment in the Cambodia, Laos, Myanmar and Vietnam region that would help Indian industry invest in the region and cater to the Chinese market.
"Vietnam is a part of the Trade Pacific Partnership grouping, which could be leveraged by the Indian industry setting up manufacturing there," said Kher.
He urged the industry to move up the value chain in its exports to China to help bridge the trade gap.
Source : economictimes.indiatimes.com
|