Trade deficit with China
What’s in the news?
- According to the latest government data, India’s trade deficit with China fell to $48.66 billion in 2019-20 on account of the decline in imports from the neighbouring country.
- Exports to China in the last financial year stood at $16.6 billion, while imports aggregated at $65.26 billion.
- The trade deficit stood at $53.56 billion in 2018-19 and $63 billion in 2017-18.
- China accounts for about 14% of India’s imports and is a major supplier for sectors like mobile phones, telecom, power, plastic toys, and critical pharma ingredients.
Measures by India
- India has time and again raised concerns over the widening trade deficit with China. The government is framing technical regulations and quality norms for several products to reduce dependence on Chinese imports.
- It has also imposed anti-dumping duties on several goods, which are being dumped in the domestic market at below the average prices from China with a view to guarding domestic players from cheap imports.
- An anti-dumping duty is a tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
- Foreign Direct Investment (FDI) from China in India has dipped to $163.78 million in 2019-20 from $229 million in the previous fiscal.
- In April, India tightened FDI norms coming from the countries which share land borders with India. As per the amended FDI policy, a company or an individual from a country that shares land border with India can invest in any sector only after getting government approval.
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