India wants a greater access to the Chinese market and there has to be an “evenness and balancing” of the country’s huge trade deficit with China for the two nations to be able to move together on the path of progress, economic affairs secretary Shaktikanta Das said on Monday.
For sustainable trade relationship, balance of trade is required between India & China,” the finance ministry said in a series of tweets attributed to Das after his meeting with a team of Chinese journalists earlier in the day. “We have trade deficit with China. We would like to increase our exports to China,” he said.
While total trade between the two nations in 2016 stood at $71 billion in 2016, India witnessed a massive trade deficit of $46 billion with China, the economic affairs secretary added.
Das pushed for greater access in at least pharmaceuticals, IT & software services and agriculture. He said Indian pharmaceutical companies can meet standards prescribed by China, as they already export to the US, which stipulates very high quality standards. “We are very strong in IT software and Pharma. We would like to export these to China along with fruits, fish & vegetables,” he added.
Maintaining that India values its economic relations with China, Das pitched for higher inflows of investments from that country. “Chinese President (Xi Jinping), during his visit to India in 2104, announced $20 bn investment in India (over a five-year period). It has started flowing now,” he said in the tweets. In fact, analysts had earlier assumed that the investments from China would offset the damaging impact of the massive trade deficit to some extent.
Cumulative foreign direct investment (FDI) from China still stood at a paltry $1.59 billion between April 2000 and September 2016, accounting for just 0.5% of the overall inflows of such investments into India, showed the data by the department of industrial policy and promotion. However, Chinese companies have stepped up focus on India in recent years. In fact, around $1 billion of the $1.59 billion of cumulative FDI from China came during the current NDA regime, which coincided with a slowdown in the Chinese economic growth.
‘Start a company in two days’
Das said India has improved the ease of doing business substantially, and one can now start a company in just two days (in select destinations). “Now in India, you can start a new company in just two days by getting online permissions…. We have simplified many procedures to increase the ease of doing business. Clearances are given very quickly,” he added.