Trade deficit with China exceeds US$100 billion

NEW DELHI: Although India’s exports have shown good growth in recent months, with a month to go before the end of the current fiscal year, India’s trade deficit with China has crossed the $100 billion mark for the first time.The latest data released by the U.S. Commerce Department estimated the trade deficit from April to February at $102 billion, compared with $91.1 billion in the same period last year. India’s trade deficit with China for the whole year was slightly less than US$100 billion. India’s trade deficit with China ranks third after the United States, and Vietnam ranks third.India’s exports to its neighbor rose nearly 38% to $17.5 billion between April and February, while imports rose more than 15% on a larger basis to nearly $120 billion.

While exports of telecom equipment or smartphones to China grew significantly – soaring nearly six-fold to $2.3 billion between April and January (the latest period for which data is available) – petroleum products (jumping 133% to $2.1 billion) and copper products ($675-500 million) also saw the biggest gains. On the other hand, there has been a sharp increase in imports of electrical machinery and telecom equipment, with electronic components topping the list of goods shipped across the border to India.While India tries to set standards to prevent cheap and substandard imports, for some products it relies on China to sustain manufacturing activity. It includes parts, machinery, chemicals, pharmaceutical ingredients, etc.In contrast, China has maintained strict inspections, including inspection requirements and other standards that restrict Indian goods from entering its market, despite repeated calls to relax regulations.