With India’s trade deficit with China, which accounts for 11.5% of India’s total imports, showing little signs of coming down, the government is now planning to diversify the trade basket and focus on manufactured goods, so as to improve the trade situation to ensure greater value addition in their bilateral trade and promote the introduction of additional goods and services in their markets.
Jyotiraditya Scindia, Minister of State for Commerce & Industry said that under-investments in manufacturing and value addition have led to a severe demand-supply mismatch in India. The creation of a market for manufactured and value-added goods from China can help in curbing this mismatch.
India’s imports from China in the fiscal year 2010-11 was $20 billion more than its exports to the world’s second largest economy, leading to a trade deficit of $23.9 billion in the fiscal against $19.2 billion in 2009-10. However, the minister also added that there was an increase in export of some value-added goods to China as compared to the previous year.
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