Indian Exports to China is an integral part of the bilateral trade relations between the two Asian countries, India and china. Indian Exports to China focus on mainly primary products. In 1984, India and China signed a trade agreement, providing for Most Favored Nation treatment, to foster greater cooperation between each other. Moreover, the year 2006 was celebrated as Friendship Year between India and China.
Items of Indian Exports to China
The principal items of Indian exports to China comprise of ores, slag and ash, iron and steel, plastics, organic chemicals, and cotton. In order to increase the extent of exporting Indian goods to China, however, there should be a special emphasis on investments and trade in services and knowledge-based sectors.
At present, iron ore constitutes about 53% of the total Indian exports to China. The other items that have potentials are marine products, oil seeds, salt, inorganic chemicals, plastic, rubber, optical and medical equipment, and dairy products. Not only this, great potential exists in areas like biotechnology, IT and ITES, health, education, tourism, and the financial sector – all of which will contribute to the services and knowledge based sectors.
The need is to shift the focus from primary exports to the export of diverse range of high value added products, including –
- Auto engine components and automobiles
- Organic and inorganic products
- Metal and metal based products like alloy steel bars and rods
- Engineering goods like diesel engines and compressors
- Marine foods
- Fresh and processed fruits and vegetables
- Medical and optical diagnostic equipment and laboratory equipment
- Consumer durables
- Textile yarns
Such diversification of Indian exports to China clearly indicates that there exists a steady demand for these products in the Chinese market.
Impediments for Indian exports to China
There are certain obstacles faced by Indian exporters in their attempts to capture the markets of China. Lack of information on customs procedures, imposition of excessive customs and other levies with frequent rate changes, complex customs valuation procedure, absence of a specified nodal agency, lack of transparency regarding technical standards, differentiated testing norms for imported and domestic products, unfamiliarity with regard to provincial rules and regulations, and frequent change in policies without any advance information on those changes are just some of those problems.
Potential for Indian exports to China
In order to increase the level of Indian exports to China, there should be a continuous interaction through an exchange of delegations, enhancing participation in each other’s trade fairs and seminars and facilitating trade through positive initiatives.
After years of decline, Indian exports to China rose sharply in the first four months of this year registering a 20 per cent increase to $5.57 billion, though the trade deficit continued to persist.Indian exports received a major boost mainly due to China increasing the steel consumption by importing big quantity of iron ore as well as gems and diamonds besides cotton materials.