Causes for the slump in trade are more structural
India’s trade deficit with China after 11 months of this year has reached a record $29.5 billion, exceeding last year’s annual figure, according to newly released trade data.
The numbers underline the sharp decline in once-burgeoning trade, which reached $74 billion in 2011 when China became India’s biggest trading partner.
The following year, a 20 per cent slump in India’s exports, largely on account of iron ore mining bans, coupled with the global slowdown, resulted in a 10 per cent decline as trade fell to $66.50 billion, even as both countries announced an ambitious $100 billion target for 2015.Doubts over achieving target
The latest figures have cast doubt on whether that target may be achieved. During the period under reference, even as China’s trade with the rest of Asia as well as with its major Western trading partners has picked up, trade with India has remained in a slump, suggesting that causes were more structural rather than a reflection of global trends.
After 11 months of this year, India’s exports to China reached only $14.87 billion out of total bilateral trade of $59.24 billion, according to data released this week by the China’s General Administration of Customs.
Trade between the two countries was down by 2.7 per cent year-on-year, even as China’s overall global trade rose 7.7 per cent. This was driven by an export sector that has continued to show signs of revival, growing 12.7 per cent and marking the second straight month of rising exports.
Among China’s biggest trading partners, trade with the U.S. was up by 7.6 per cent. China’s trade with Southeast Asian countries showed the biggest growth, growing 10.9 per cent.
Border trade up 23 per cent, still minuscule India’s border trade with China, while still at a minuscule $14 million, grew 23.3 per cent last year, local authorities in the Tibet Autonomous Region (TAR) were quoted as saying by the official Xinhua news agency this week.
Trade has grown more than 50 times since 2006, when the Nathu La pass, between Sikkim and the Shigatse prefecture in Tibet, was reopened. Most of the trade is made up of imports of Indian goods into Tibet, which reached $12 million last year. Authorities said the border market is open for only six months of the year — opening on May 1 and closing on November 30.