Trade deficit with China dwarfs India’s trade surplus with SAARC countries

Myanmar is the second neighbouring country with which India has a trade deficit.

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India Trade TDB2 India’s trade surplus is high with Bangladesh, Nepal, and Sri Lanka.

  India’s trade deficit with China stood at a staggering $36.22 billion in FY2013-14, which is almost two-and-half times the trade surplus of $14.87 billion India enjoys with members of the South Asian Association for Regional Cooperation (SAARC) comprising Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka. According to India’s Minister of Commerce Nirmala Sitharaman, China is currently India’s largest trading partner in bilateral trade, and the widening trade deficit with China is a major concern for India. She said that the recent MoU on Cooperation on Industrial Parks in India is expected to bring investment from China into India. “This will accelerate development of competitive manufacturing sector in India as a result of which many goods which are now being imported from China could be expected to be produced in the country which in turn is expected to reduce the country’s trade deficit,” Nirmala Sitharaman added.  

India trade saarc-TDB graph Source - Ministry of Commerce, India

  India’s trade surplus is high with Bangladesh (about $5.6 billion), Nepal (about $3 billion), and Sri Lanka (about $3.9 billion). However, the trade surplus with Pakistan is around $1.84 billion. Nirmala Sitharaman says that while both India and Pakistan have a Preferential Trading arrangement under South Asia Free Trade Area (SAFTA) process, the benefits under the SAFTA process are partially blocked by Pakistan through ‘Negative List’. India granted the Most Favoured Nation (MFN) status to Pakistan in 1996, but Pakistan is yet to reciprocate due to opposition from various sectors in Pakistan. Myanmar is the second neighbouring country with which India has a trade deficit.    

The Dollar Business Bureau - Jul 24, 2014 12:00 IST
 
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