India can explore export potential in food items to bride trade gap with China

Amid rising concern over the widening trade deficit with China, India can explore export potential of food products like dairy products, marines, fresh and processed items to China with a view to bridge the widening trade gap. India’s trade deficit with China stood at about $36 billion during FY14 with exports around $15 billion against $51 billion imports. India has already expressed concerns over widening trade deficit with China and limited market access to its products due to a host of issues. India exports raw materials and imports mostly finished items. The exports of domestic products like engineering goods, pharmaceuticals and farm products is limited due to various issues related to tariff barriers, regulatory and other complexities. However, the government is taking various measures to enhance the Chinese investments in the country. It had recently given an in-principle approval to a memorandum of understanding (MoU) allowing China to set up industrial parks in the country. The industrial parks are expected to include special economic zones (SEZs) and manufacturing zones. At present, China is setting up two industrial parks in states including Maharashtra and Gujarat. Further, India and China have set $100 billion trade target by 2015. However, India had already asked the Chinese government to provide more access to the market so that the target of $100 billion can be achieved in a more balanced manner. Better access of Chinese markets to domestic IT-enabled services, cotton textiles, home furnishings and pharmaceuticals could also help India to reduce the imbalance in trade.