Sino-Indian trade deficit up 34% to $48 bn in FY15

New Delhi/ Shanghai: Trade deficit between India and China increased about 34 <g data-gr-id="63">per cent</g> to $48.43 billion in 2014-15 from $36.21 billion in the previous fiscal, Parliament was told on Wednesday. India’s concern on the rising deficit has been discussed with China at various fora, including the highest level of leadership of the two countries, Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Rajya Sabha.

The issue is also likely to figure during the visit of Prime Minister Narendra Modi this week to China. “In order to boost exports and address the widening trade deficit with China... the government has taken a number of initiatives to identify specific product lines with export potential, actively taking up issues relating to tariff and non-tariff barriers in bilateral meetings and institutional dialogues,” she said.

According to provisional figures, in 2014-15, India’s exports to China stood at $11.95 billion while imports were $60.39 billion. In a separate reply, she said India has consistently sought greater market access for India’s exports to China, especially in fields like pharmaceuticals, agriculture bovine meat and IT services.  In a separate reply, the minister said there are three land customs station on India-China border -- Gunji (Uttarakhand), Sherathang/Nathu-La (Sikkim) and <g data-gr-id="64">Shipki</g>-La/<g data-gr-id="65">Namgia</g> (Himachal Pradesh). 

Meanwhile, China’s bank lending slowed in April from the previous month, its central bank said on Wednesday, reflecting slowing growth in the world’s second-largest economy. Domestic banks extended new loans of 707.9 billion yuan ($115.9 billion), the People’s Bank of China (PBoC) 

said, down from 1.18 trillion yuan in March. Total social financing — a broader measure of credit in the economy — totalled 1.05 trillion yuan for April, it said, down from 1.18 trillion yuan in March.

The median forecast for total social financing, also known as aggregate financing, in a survey of economists by Bloomberg News was 1.2 trillion yuan. China’s economy expanded 7.0 percent year-on-year in the first quarter, slumping to a <g data-gr-id="61">post global</g> financial crisis low, even as Beijing took steps to bolster growth.

The country’s gross domestic product (GDP) expanded 7.4 percent in 2014, the slowest pace in 24 years, and the government has cut the annual growth target for 2015 to “approximately” seven percent. The PBoC has been taking steps to boost the economy, announcing a third cut in interest rates in six months on Sunday to facilitate credit expansion and address subdued consumer inflation.

In April, it also lowered the reserve requirement ratio -- the amount of money banks must put aside as reserves -- to encourage lending, for the second time in three months. “Weak social financing will intensify downward pressure on the real economy and further (monetary) loosening is unavoidable,” China Merchants Bank analyst Liu Dongliang said in a research note.

“Combined with the economic figures released earlier in the day, economic growth for May and June will be under pressure,” Liu said. China has released a slew of weak economic data for April, with consumption and investment growth figures dropping to multi-year lows.