Chinese
stake in the growing Indian market is increasing massively and the current
annual trade surplus of over USD 40 billion (about Rs 2,22,000 crore) may touch
USD 44 billion by at the end of the current year, an ASSOCHAM analysis of the
bilateral trade has shown.
Without
suggesting for a moment that India should strain its ties with
China, ASSOCHAM said, “It is in the best interest of the two neighbouring
countries that their relations improve and are cemented through expanding
commercial engagement”.
Expressing
confident the two countries would be able to resolve their strategic
differences during the visit of Chinese Premier next month, ASSOCHAM said, against
its mammoth imports of USD 50 billion from China alone, India’s exports of
merchandise goods were far short at USD 12.41 billion during April-February,
2012-13 (the latest disaggregated data) to that country. For the fiscal
2012-13 as a whole while imports from China may well exceed USD 57 billion
while India’s exports to that country may not exceed USD 14 billion.
The trend
in the financial year of 2012-13 has more or less followed that of the previous
fiscal when China ran a trade surplus of USD 40 billion despite repeated
concerns raised by the Indians at the highest level.
“At a time
when Chinese economy, like most other economies of the world, is slowing, its
exports to India would be of vital interest to the Chinese dispensation. In a
way, the economic engagement is the best way to bridge all other differences.
China alone accounts for over 11 per cent of India’s total imports making it a high
stake commercial interest for the neighbouring country,” ASSOCHAM commented.
Electronics,
machinery, precious pearls and other commodities are the principal items of
import from China. In the last fiscal (11 months for which disaggregated data
is available), of the total imports of USD 141 billion of five top items of
imports , China alone accounted for USD 22.80 billion.
When it
comes to exports, main items which are shipped to China are petroleum products,
transport equipment, machinery and drugs and pharmaceuticals.
In the
fiscal 2012-13, the exports to China are estimated to have been lower than that
in the previous fiscal.
A large
trade imbalance has been a matter of concern and should again be raised at the
highest level with the Chinese leadership. The Indian exports of several items,
especially drugs and pharmaceuticals face trade barriers in China.
A
large-scale dumping of Chinese goods has hurt interest of the Indian
businessmen and manufacturers in their own markets. Most of the damage has been
done to the small and medium enterprises which find it difficult to compete
with the economies of scale from aggressive exporters. Be it toys,
worship idols, lightings, tubes, the Chinese goods are all there.
In the
recent past, the Chinese commercial aggression has not limited itself to small
and medium scale items, but to heavy engineering. The home-grown PSU and
private firms such as BHEL and L and T have suffered a lot at the hands of
Chinese power equipment manufacturers. The story is somewhat similar in the
telecom gear.
“Net-net,
it is more in the interest of the Chinese to stay commercially engaged
maintaining the best of strategic and political relations as well, “ASSOCHAM
said.
