Indian exports, mainly driven by cotton and iron ore to China amounted to USD 20.8 billion while Chinese exports to India totalled to USD 40.8 billion, virtually double that of Indi
Bilateral trade between India and China exceeded the two countries' $60 billion target last year, driven largely by rising Indian imports of Chinese machinery that have left a record trade imbalance of $20 billion in China's favour.
Figures released for last year showed that bilateral trade in 2010 reached $61.7 billion, with Chinese exports to India touching $40.8 billion.
This marked a 43 per cent jump in trade volume from last year, when the recession reduced two-way trade to $43 billion. In 2008, China became India's largest trade partner with $51.8 billion in bilateral trade.
Despite the growth, the figures underscore rising Indian concerns over the fast-widening trade deficit, with Indian exports, largely made up of iron ore, other raw materials and cotton, contributing a little over $20 billion — equalling the size of the deficit.
Indian officials have pressed China, most recently during Premier Wen Jiabao's December visit to New Delhi, to address the growing deficit by providing better market access for Indian pharmaceutical and Information Technology companies here which have struggled to penetrate the Chinese market.
Officials say the deficit is otherwise likely to widen even further in the coming year, with iron ore sales, which have driven Indian exports, expected to fall with the recent ban in Karnataka. India is China's third biggest supplier of iron ore, behind Brazil and Australia. But following the ban, Chinese importers have increasingly diversified their imports, seeking out new markets such as South Africa and Ukraine.
China, in contrast, exports finished goods to India, mainly machinery. Growing demand for Chinese telecom and power equipment has fuelled the growth in trade.
Indian officials say the one bright spot in the coming year could come from Indian pharmaceutical companies, with China set to accelerate a $2-billion reform in its healthcare sector in coming months. Officials from China's State Food and Drug Administration made a recent visit to India, with a delegation of Indian pharmaceutical companies scheduled to visit China in March.
China's Health Minister Chen Zhu said last year the country welcomed Indian pharmaceutical companies, known here for their cost- competitiveness, to help address the growing demands of the China market.
“We know India's pharmaceutical sector, including non-generic and creative medicine, is leading the developing world,” he said, adding that “China has a huge market potential for healthcare services and medicine. We more than welcome pharmaceutical companies from countries like India to China.”