New Delhi, Apr 25: India will take up the issue of a widening trade deficit and greater market access for domestic products during Prime Minister Narendra Modi's visit to China later this month, a top commerce ministry official said.
"The key items (which India will raise) are how to address the large trade deficit issue. How to bridge the deficit?" Commerce Secretary Rajeev Kher told reporters on the sidelines of Global Exhibition on Services, which was organised by CII and the ministry.
What is the agenda?
He said that during the Prime Minister's visit, India would also discuss ways to increase presence of domestic products, including automobiles and pharmaceuticals, in the Chinese market.
"We will also see how Chinese investments can be channelised in India," he said. India's trade deficit with China climbed to a whopping USD 37.8 billion last year whereas bilateral trade stood at USD 65.85 billion in 2013-14. "The size of the deficit is alarming," Kher said.
Modi is scheduled to undertake a three-nation tour of China, Mongolia and South Korea this month. Kher also underlined the importance of pursuing a more focused strategy to promote trade with its northern neighbour.
Modi govt's strategy
To help Indian industry move up the value chain, he stated that the government is following a three-pronged strategy which included addressing specific market access issues in sectors such as drugs and pharmaceuticals, IT/ITeS, agriculture and food processing, and encouraging Chinese manufacturers of finished goods to set up production base in India.
The Secretary also spoke of government efforts in encouraging Indian industry to enter those sectors where Chinese manufacturing is in decline to fill the gap.
"The government is setting up an SPV to promote investment in Cambodia, Laos, Myanmar and Vietnam (CLMV) region. This SPV would help Indian industry invest in the CLMV region and cater to the Chinese market," he added. Kher also released a CII Report on 'Accelerating Indo-China Economic Engagement', which outlines the overall strategy of accelerating economic engagement between India and China.
The report suggested a 4-point action plan to bridge the trade deficit. This includes push for market access in key sectors where India can add value to Chinese economy, prioritising Chinese FDI in 18 identified sectors and a sovereign deal to attract investment in infrastructure.