India and China attempt to redress trade imbalance

At a business meeting organised by FICCI, as many as 40 MoUs were signed in an attempt to redress the Sino-Indian trade. China was India¡¯s largest trading partner and currently, India¡¯s exports consist mainly of raw materials and low value products.

TO REDRESS the imbalance in Sino-Indian trade, as many as 40 Memorandum of Understandings (MoUs) were signed in New Delhi on Saturday (October 11) between top state-owned and private Chinese enterprises and Indian corporates.
Trade deals to source a range of products worth over US$ 390 million from India such as polyethylene, polypropylene, marine products, aluminum, manganese, cotton, chrome and castor oil.

Among the major Indian companies, which exchanged MoU documents with Chinese corporations are: Reliance Industries Ltd, Sterlite Industries Ltd, Ranbaxy, Adari Wimar Ltd, BALCO, Bharat Mining Company and TT Ltd.

The MoUs were signed in the presence of Gao Hucheng, the Chinese vice minister of commerce and Dinesh Sharma, joint secretary, ministry of commerce at a business meeting organised by Federation of Indian Chambers of Commerce and Industry (FICCI).

Hucheng said, ¡°The Chinese response comes in the wake of Prime Minister, Dr Mamohan Singh¡¯s visit to China last year where he had expressed hope that the Chinese government would take positive steps to redress the trade imbalance of US$ 16 billon against India by sourcing Indian products for the Chinese market.

China, he said, was a huge market and invited Indian investors and entrepreneurs to visit China and determine the Indian products that would appeal to the Chinese people.

Dr Amit Mitra, secretary general, FICCI, proposed that in order to balance the trade between the two countries and build sustainable trade relations, the two governments could look at five or six items, which were being competitively produced by India and being exported to America, Europe and Japan. These identified thrust items would be acceptable in the Chinese market because of the competitive price and India would get easy access to the Chinese market.

Dinesh Sharma, joint secretary, ministry of commerce, pointed out that China was India¡¯s largest trading partner and currently, India¡¯s exports consist mainly of raw materials and low value products.

Of the US$ 38 billion total bilateral trade` volume in 2007-08, India¡¯s exports were valued at US$ 11 billion and imports from China at US$ 27 billion. As high as 50 per cent of the value of exports were accounted for by iron ore.

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