Govt pushing industry to widen exports to China
New Delhi: Amid widening trade deficit with China, the government is channelising funds for promoting Indian goods in the neighbouring country with a view to bridging the trade imbalance, a senior official said.
"We are taking steps to reduce Chinese imports. The Commerce and Industry Ministry is pushing exporters to organise more and more fairs and shows to showcase their products. We are channelising funds to support such events," the official said.
The trade deficit between the countries crossed USD 40 billion in 2011 with China being the larger trading partner.
The official said that huge exports potential exists in China in wide range of sectors from pharmaceuticals to software. "We see huge opportunity in China mainly in the lower end of manufacturing."
Ballooning trade deficit have become a serious economic threat for the country as the current account deficit (CAD) had touched a 30-year high of 4.2 percent of the GDP or USD 78 billion in 2011-12.
CAD occurs when country?s total imports and transfers are higher than its total exports and transfers.
It has contributed to a sharp depreciation in the Indian rupee and has put enormous pressure on the country to attract foreign capital.
Although the government is taking steps to reduce Chinese imports, India's apex exporter body FIEO said that there is a need to organise at least four 'Made in India' shows in a year in China.
"These shows will help Indian exporters. They will be able to showcase their strength in different sectors. Every year, our members are participating in seven fairs," Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said.
The cabinet had approved a 21 percent tariff on imports of equipment for big power projects, a move aimed at protecting domestic manufacturers from Chinese competitors.
Expressing similar views, Apparel Export Promotion Council Chairman A Sakthivek said that China is the largest trading partner of India and there is a need to increase exports to bridge trade deficit. "We will organise fairs in China next year," he said.