India's trade with China has increased but deficit has widened: Foreign Secretary

New Delhi [India], October 21 : Amid ongoing border tensions between India and China, Foreign Secretary Harsh Vardhan Shringla on Thursday noted that despite the growth in the volume of the trade between the two neighbours, the trade deficit has increased and the imbalance has widened.
Speaking at a Seminar on "Leveraging China's Economy", Shringla also raised concern about the trade imbalance that has continuously been widening despite growth in the overall volume of the trade.
"Our trade deficit concerns are two-fold - the first, is the actual size of the deficit. Trade deficit for the nine months period stood at USD 47 billion. This is the largest trade deficit we have with any country. Second, is the fact that the imbalance has continuously been widening," said Shringla.
"We have highlighted that widening deficit and increase in trade barriers are issues of concern. These have been regularly flagged at the highest level, most recently at the 2nd Informal Summit between our Prime Minister (Narendra Modi) and the Chinese President (Xi Jinping) in Chennai in 2019," he added.
Foreign Secretary stated that bilateral relations generally followed a positive trajectory since 1988 when we re-established contacts at the highest level and advancement of ties was clearly predicated on ensuring that peace and tranquillity were not disturbed.
Shringla added India remains firm in its commitment to placing this trade relationship on a more sustainable footing and raising these issues at all appropriate occasions with the Chinese side.
"Developments since then, including COVID-19 pandemic, have not been helpful in our efforts to address these concerns. Furthermore, the developments along the LAC in Eastern Ladakh have seriously disturbed the peace and tranquillity in border areas. This has obviously had an impact on the broader relationship too."
"Even as we continue to pursue these issues with China, we also need to do work at home. That is why, Atmanirbhar Bharat - an India with greater capabilities not just helping itself but being a force for good in the international arena, becomes important."
Noting the strides made by India on the "Digital India" campaign, Foreign Secretary said that the digital economy has become an integral part of India's development story.
"According to ACI Worldwide's report, India recorded 25.5 billion real-time online transactions in year 2020, the highest for any country. It is expected that, by 2025, digital payments will account for around 71.7 per cent of all the payments in India. This digital ecosystem has also spurred the rapid growth of Indian startups; India is now home to over 60 unicorns, many of which are based in the digital economy domain."
Speaking against the COVID restrictions imposed on the movement and gathering of people, Shringla said these restrictions have impacted economies worldwide and recovery has been uneven.
"In our case, India's GDP grew by 20.1 per cent in the first quarter of FY 2021-22, indicating a V-shaped recovery. The IMF estimates that the Indian economy will grow by 9.5 per cent in 2021 and by 8.5 per cent in the financial year 2022."
He also noted that COVID-19 has also brought forth challenges in the current form of globalization where only profit considerations have led to a very high degree of concentration of supply chain and markets.
"On the domestic front, our ongoing reforms and initiatives like Production Linked Incentives (PLI) scheme will also contribute to enhancing the resilience of India's manufacturing sector. We are regularly reviewing and reforming our investment regime to suit the current situation."
Foreign Secretary also highlighted that External Affairs Minister S Jaishankar's remarks that the ability of India and China to work together will determine the Asian century.
"For this to materialise, peace and tranquility in the border areas is a sine qua non. He has also clearly articulated that development of our ties can only be based on mutuality - mutual respect, mutual sensitivity and mutual interests should guide this process."
Lastly, Shringla hoped that the Chinese side will work with us to bring a satisfactory resolution to the current issues so as to make progress on our bilateral relations keeping in view each other's sensitivities, aspirations and interests.