India’s Trade Deficit with China Continues to Grow, Rises to $53B in FY16
India's trade deficit with China continues to grow, increasing to $52.69 billion in 2015-2016 from $48.48 billion in the previous financial year, starkly reminding that the Indian economy still has lot of catching to do with its Asian neighbor.
The report was disclosed by India's Commerce and Industry Minister Nirmala Sitharaman in her written reply to the Indian Parliament on Monday. She cited China's overreliance on export of "manufacturing items" as the main reason for the growing trade deficit.
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"Increasing trade deficit with China can be attributed primarily to the fact that Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors like telecom and power," the minister said.
The Indian commerce minister added that efforts are already underway to lower the trade deficit by diversifying India's trade basket with special focus on manufactured goods and services, while seeking resolution of greater market access and other non-tariff barriers.
She claimed that no ban or trade restriction can be imposed in China under the current WTO framework and any restriction implemented will have to be WTO compliant.
Indian Economy vs Chinese economy
Over the years, there has been intense debate among Indian intellectuals as to why Indian economy fares so poorly as compared with the Chinese economy. China's economy witnessed an impressive double digit growth for most part of the last two decades, while Indian economy had to remain contend with single digit growth.
A large majority of Indians believe that the country's corrupt bureaucracy and lethargic democracy, which starkly stands to China's efficient single party system, is to be blame for the poor economic performance.