Trade deficit with China could become politically sensitive: Indian envoy

The large trade deficit with China could become a politically sensitive issue in India if it isn’t addressed, ambassador Vikram Misri has said, adding that neither is the shortfall economically sustainable.

 

Balanced trade is likely to be on the top of the agenda when President Xi Jinping visits India later this year, a visit, described by Misri as the centrepiece of bilateral ties this year.

 

It (Xi’s visit) is going to be the centrepiece of India’s engagement with China this year, state-controlled China Daily newspaper quoted Misri him as saying in an interview published on Tuesday.

 

The Indian envoy, however, was clear about the pitfalls of skewed trade ties though he was optimistic that it set to cross the $100 billion in the future.

 

That kind of deficit is not economically sustainable, and it can also become politically sensitive if we don’t take steps to address the deficit, Misri told the newspaper.

 

Reports from India said in April that the trade deficit with China had been reduced by $10 billion to $53 billion in 2018-19 year-on-year India’s exports to China rose to $17 billion during the year from $13 billion during 2017-18, while imports declined to $70 billion from $76 billion.

 

On the state of ties between the two countries, Misri said New Delhi and Beijing have worked well in managing differences following the icy chill that had all but set in after the Doklam (Donglang) military standoff in 2017.

 

It’s an interactive process, Misri said, responding to a question whether relations are guided by pragmatism or has mutual political trust increased.