India on Thursday signed a protocol for the export of chilli meal to China, as part of a move to promote “more balanced trade” between the two Asian countries.
The decision was part of a meeting held between Indian Commerce Secretary Anup Wadhawan and Chinese General Administration of Customs Vice Minister Li Guo in the Capital, where the two nations agreed to resolve market access issues “expeditiously”.
This is the eighth agricultural product since 2003 for which India and China have signed a protocol for trade.
The move comes amidst an ongoing trade war between China and the United States, as the latter this week threatened to increase tariffs on approximately $200 billion worth of products imported from China “in light of the lack of progress in the additional rounds of negotiations since March 2019”.
China is India’s largest trade partner and, while there has been a slight reduction in the trade imbalance between the two in the last two fiscal years, there still remains a significant trade deficit.
Data from the Commerce Ministry’s website shows that India has imported $65.23 billion worth of goods from China between April 2018 and February 2019, while it has only exported $15.07 billion worth of goods to the country.
In 2017-18, India’s exports to China were around $13.30 billion, while its imports were higher at around $76.40 billion.
Earlier this year, India reportedly submitted a list of 380 products where there is a large potential to improve exports to China.
This list reportedly includes agricultural, horticultural, pharmaceutical, textile, chemical and engineering products.
Last year, India reportedly stated during China’s trade policy review at the World Trade Organisation (WTO) that the country needed to make serious efforts to remedy its deficit with India, which had been growing.
India had reportedly flagged issues with exports of meat, rice, medicines and IT services, seeking lower barriers in these areas to improve the trade imbalance.
For instance, the Commerce Ministry data shows that India’s export of rice to China dropped to $90,000 in 2017-18 from $2.25 million in 2015-16.
Its exports of basmati rice, for which protocols were signed with China in 2006 and again June 2018, had remained stagnant at around $50,000 in 2016-17 and 2017-18 and had only grown around $10,000 since 2013-14, according to the Ministry data.
India’s exports of pharmaceutical products to China increased to around $42.85 million in April 2018-February 2019 from around $41.07 million in 2017-18.
Exports in this category had slumped to $22.88 million in 2015-16 from $46.58 million in 2013-14.
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