India signs agreements with China to reduce trade deficit

Sachin Manawaria | @TheDollarBiz India has signed MoU (Memorandum of Understandings (MoUs) worth over $2.46 billion with China at a conference jointly organised by Federation of Indian Chambers of Commerce and Industry (FICCI) and China’s Zhejiang Federation of Industry and Commerce. The MoUs include a $1.5 billion deal between Kunlun Chuangyuan Investment Co Ltd and Kiri Infrastructure Pvt Ltd for the India International Trade Centre in Gujarat project and a $500 million Solar project Co-investment between SunEdison Energy India Pvt Ltd and CHINT Solar (Zhejiang) Co Ltd.

Source - Ministry of Commerce, India

Amitabh Kant, Secretary (DIPP), India’s Ministry of Commerce and Industry, said, “There is a need for the dynamic entrepreneurs of India and China to collaborate and deepen the business engagement top conquer the world markets.” India has a trade deficit of around $135.8 billion as of FY2013-14, of which deficit with China accounts for around 27% or $36.2 billion. The agreement with China is seen as a step closer to bring down the trade deficit with China. Kant said that India faces a trade deficit which is an unsustainable situation and cannot continue for long. He added that India’s expertise in IT and China’s strong manufacturing capabilities offer a high potential in collaboration. Sidharth Birla, President, FICCI, said, “We are happy that China has acknowledged that trade deficit is a matter of concern to us; and our five year trade and economic cooperation pack is geared to addressing this.” He urged the Chinese government to resolve market access problems faced by Indian companies in sectors such as Pharmaceuticals, IT and Agriculture products. China should also increase imports of value-added products from India, he said. Jack Ma, Executive Chairman, Alibaba, said that Indo-China business cooperation has a lot of potential and was hopeful of having more Indian vendors sell their products to Chinese users via Alibaba. He said, “Internet is changing the world and Internet will change India too.”  

This article was published on November 27, 2014.