The widening trade imbalance is now set to exceed last year’s record $29 billion
Indian exports to China were down 30 per cent year-on-year in the first half of the year, according to new trade figures released here on Wednesday.
Overall, bilateral trade fell 7.2 per cent after six months of the year to $31.68 billion, with the decline in Indian exports to China, mainly comprised iron ore and cotton, driving the slump.
Indian imports were up 4.2 per cent to $23.62 billion, with the trade deficit reaching $15.56 billion in China’s favour, according to data released by the Chinese General Administration of Customs (GAC).
The widening trade imbalance is now set to exceed last year’s record $29 billion, even as overall bilateral trade appears to be in decline. Trade reached $66 billion last year, down from $73 billion in 2011 when China was India’s biggest trade partner.
The GAC trade data painted a gloomy picture of China’s foreign trade, as exports overall fell for the first time in 17 months. Analysts who had expected a 3-4 per cent rise in exports in recent surveys were left surprised by a 3.1 per cent year-on-year decline, while imports fell by 0.7 per cent.
The 2 per cent decline in foreign trade was largely the result of continuing weak global demand, coupled with slowing domestic demand and higher labour costs at home, Zheng Yuesheng, a spokesperson for the GAC, told reporters.
“In the short-term, all these risks cannot be eliminated,” he said, according to the official Xinhua news agency.
Mr. Zheng forecast a continuing decline in China’s demand for resources in a suggestion that Indian exports to China — driven mainly by iron ore and other commodities — are unlikely to recover in the second half of the year. The Chinese economy grew 7.8 per cent in 2012, and recorded 7.7 per cent growth in the first quarter of the year.