India’s trade deficit with China reached a record $ 31.4 billion in 2013, with two-way trade declining last year by 1.5 per cent on account of a sharp decline in Indian exports, new trade figures released in Beijing on Friday showed.

Indian exports to China last year totalled $ 17.03 billion - a 9.4 per cent fall from last year - out of $ 65.47 total bilateral trade, according to figures released by the Chinese General Administration of Customs (GAC). Chinese exports to India, in recent years largely comprised of machinery, were up 1.6 per cent.

Friday’s annual figures marked the second straight year of declines, highlighting the unexpected slowdown in rapidly growing trade ties that came to be seen as one of the key drivers of a relationship amid political uncertainties such as the long-running boundary dispute.

Bilateral trade reached a record $ 74 billion in 2011, when China became India’s largest trading partner. Trade declined to $ 66.5 billion the following year, on account of the global slowdown and a 20 per cent drop in Indian exports. The fall in exports was largely due to curbs on the export of iron ore, which had emerged as India’s single biggest export to resource-hungry China.

Friday’s data showed an overall recovery in China’s foreign trade outlook, recording 7.6 per cent year-on-year growth, although missing the government’s 8 per cent target. Despite the challenge from grim global demand and an appreciating currency, China’s exports grew 7.9 per cent to $ 2.21 trillion, the GAC said.