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India cuts trade deficit with China by US$10b: sources
[NEW DELHI] 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 US-China trade war.
The South Asian nation's exports to China jumped 31 per cent year-on-year to US$17 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 US$10 billion to US$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 per cent.
"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 Organisations, said by phone. "China has agreed to give increased market access, as it sees India filling in the gap left by the US."
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 per cent jump in the April-February period, grapes by 200 per cent, raw cotton 226 per cent, and plastic raw materials 134 per cent.
Falling imports from China also helped shrink the trade gap. India's purchases from its largest commercial partner declined to US$70 billion last fiscal year from US$76 billion in the previous year, the people said.