Beijing moves to soothe India over $100 billion trade deficit

Beijing has signalled its intention to address India's concerns about a growing trade deficit that was estimated at a record $100 billion in FY25, people close to the development said, with the aim apparently of placating New Delhi through more imports amid Beijing's escalating trade war with Washington.

- Rajeev Jayaswal & Rezaul H. Laskar

NEW DELHI:

China has informally sent feelers about addressing India's concerns on the trade deficit though higher imports of Indian goods by removing tariff and non-tariff barriers, at least three people aware of the matter said on condition of anonymity. The move comes at a time when China is grappling with US tariffs of 145% on all Chinese goods.

India hasn't taken any formal position on the matter as yet because such bilateral talks involve the principle of reciprocity. New Delhi fears that easing trade barriers bilaterally could further aggravate the dumping of Chinese goods in India, these people added.

In addition to the informal feelers, Chinese ambassador Xu Feihong recently spoke of the possibility of China buying more Indian goods and attracting investments from Indian firms. In an interview with state-run Global Times just before US President Donald Trump unveiled his reciprocal tariffs, Xu noted that India-China ties are at a crucial juncture and New Delhi should create a fair and transparent business climate for Chinese companies.

The people, however, said the easing of tariff and non-tariff barriers may benefit China more than India because it would allow direct imports of Chinese goods that are currently illegally routed through a third country with which India has a free trade agreement (FTA), such as India's trade deal with the 10-member Asean bloc. "China dominates global trade with about $1 trillion surplus at the expense of major economies such as the European Union, the US, Japan and India. It adopts unfair means and resorts to predatory pricing through tacit subsidies to its exporters, aiming to kill competitors," one person said.