India cut its trade deficit with China by the most in more than a decade, according to people familiar with the data, as it boosted exports amid a U.S.-China trade war.
The South Asian nation’s exports to China jumped 31 percent year-on-year to USD17 billion in the financial year ended March 31, the people said, asking not to be identified as the data is not public yet. In the process, it cut the bilateral trade deficit by $10 billion to $53 billion.
The surge in exports was mainly due to greater demand for marine products, grapes, raw cotton and plastic raw materials: items that were casualties in President Donald Trump’s trade war with Beijing. This is the second straight year that India’s shipments to China have grown by more than 30 percent.
“Exports with China will do much better this year than in the last few years,” Ajay Sahai, director general and CEO of the Federation of Indian Export Organizations, said by phone. “China has agreed to give increased market access, as it sees India filling in the gap left by the U.S.”
New Delhi has also used the opportunity to push for greater cooperation with China on trade, using talks for a Beijing-backed 16-nation Regional Comprehensive Economic Partnership, or RCEP, as a lever.
Last year, India won market access for sugar, rice, pharma, grapes, fish meal, fish oil, rapeseed meal, and tobacco. It is now working to export soybean meal, pomegranates, banana, pineapple, okra and corn among other items. The results have been encouraging — export of marine products to China witnessed a 346 percent jump in April-February period, grapes by 200 percent, raw cotton 226 percent, and plastic raw materials 134 percent.
Falling imports from China also helped shrink the trade gap. India’s purchases from its largest commercial partner declined to $70 billion last fiscal year from $76 billion in the previous year, the people said. Shruti Srivastava, Bloomberg