Beijing: India-China bilateral trade which flourished till last year is facing a downturn in 2012 with overall trade declining to USD 55.6 billion in the first ten months, while trade deficit for India has ballooned to USD 23 billion.
According to official figures released here, Indian exports to China totalled to USD 16.3 billion registering 13.3 percent decline.
The decline was largely due to fall of Indian iron ore exports which constituted about 50 percent of India's exports, Trade Consular of the Indian Embassy here K Nagraj Naidu said.
The overall trade figure of USD 55.6 billion between the Asian nations is a drop of 8.1 percent year-on-year.
A cursory look at the preliminary trade data shows that exports of different products from India have not been much affected but the main slump is caused by the decline in iron ore exports which was more due to various domestic reasons like restrictions on mining, Naidu said.
Also, exports were partly hit by depreciation of the rupee, which is discouraging the Indian exporter to aggressively market their products in Chinese markets as returns are poor, he said.
Besides, steel consumption in China, till recently regarded as the world's factory for its massive export potential, has come down due to fall in its global markets especially, the EU and the US.
Many Chinese steel factories including the country's biggest factory -- the Bao Steel in Shanghai -- have been closed as a result.
Naidu said the declining trend in iron ore exports should provide an opportunity to rebalance India?s trade to China from primary goods to products like IT, pharmaceuticals and agricultural goods which have been identified as products with great demand.
India has been conducting various campaigns in association with the Chinese Commerce Ministry to popularise these products here.
Significantly China's exports to India also registered a downturn. According to the figures, China's exports totalled USD 39.3 billion in the last ten months registering a decline of 5.7 percent.
The decline in bilateral trade is disquieting because the top leadership of both the countries fixed USD 100 billion trade target for 2015 to strengthen the relations between the two Asian giants.
Until last year, it looked possible as the bilateral trade touched a high point of USD 73.90 billion.
The declining trend has figured prominently in the meeting of the Commerce Ministers held in New Delhi when they met for the ninth round of India-China Joint Economic Group, (JEG), which according to Indian officials finalised a number of initiatives to be unfolded after the leadership change in China.