Economic Surver 2014: India needs to increase exports to China: Economic Survey

NEW DELHI: Amidst high trade deficit between the two nations, the Economic Survey today said India needs to increase its exports to China as huge potential exists in the neighbouring country.

"China is one of the important market destinations where India's export potential has not been adequately realised," it said.

The survey said the major potential items of exports to China, other than mineral products, are machinery, mechanical appliances and products of chemicals where around one-third of India's bilateral export potential lies.

"India's large trade potential is yet to be tapped in diversified sectors of the Chinese market ranging from primary and labour-intensive products to various levels of technology-intensive products," it said.

The bilateral trade between the two countries stood at $ 68.9 billion in 2013-14.

The trade deficit against India during the period was about $ 35 billion.

"India's export potential is highly concentrated in certain sectors with nearly seven major sectors accounting for around 90.2 per cent in the medium term, with most of them being in the manufacturing sector," it said.

A comprehensive Indo-China trade strategy which also takes note of India's domestic concerns like dumping of cheap Chinese goods could be mutually beneficial, it added.

The share of China in India's total trade increased from 2.5 per cent in 2000-01 to 8.6 per cent in 2013-14 and India's share in China's total trade increased from 0.7 per cent in 2001 to only 1.6 per cent in 2013.

India has been pressuring China to open its markets to IT and Pharmaceuticals to bridge the trade gap. China has promised to step up investments in India to address the deficit concerns.

On anti-dumping probe, the survey said that in 2013, 283 anti-dumping investigations were initiated by all countries with Brazil overtaking India, initiating more than double the investigations.

In 2013, both Brazil and the USA were ahead, relegating India to third place in initiating anti-dumping investigations.

Countries initiate anti-dumping probes to check if the domestic industry has been hurt because of a surge in below- cost imports.

As a counter-measure, they impose duties under the multilateral WTO regime.