Increase In Trade Deficit

GOVERNMENT OF INDIA

MINISTRY OF  COMMERCE AND INDUSTRY

STARRED QUESTION NO-401

ANSWERED ON-21.12.2011

a) whether it is a fact that the country''s trade deficit has increased to a four year high;

b) if so, the details thereof; and

c) the steps/measures taken by Government to contain the trade deficit?

ANSWER

MINISTER OF COMMERCE AND INDUSTRY
(SHRI ANAND SHARMA)


a) to c): A Statement is laid on the Table of the House.

ANNEXURE 

STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (c) OF  RAJYA SABHA STARRED QUESTION NO. 401 FOR ANSWER ON 21ST DECEMBER 2011 REGARDING “INCREASE IN TRADE DEFICIT”

(a)Yes Sir.  

(b)The details of the country’s trade deficit for the last four years and the current year are as under:

Year	Export	Import	Trade deficit
2007-08	163	252	89
2008-09	185	304	119
2009-10	179	288	109
2010-11	251	370	119
2011-12 (April – November) Provisional	193	310	117

The Trade Deficit for the 8 month periods April-November has been the highest compared to the corresponding periods in the last 3 years.

(c)    The rate of growth of exports for 2009-10 has been -3.5% and for 2010-11 it has been 40.4%.  For the period April-November, 2011 the growth rate has been 33.2% which is quite robust.   However, imports have also been growing both because of higher prices of importables and increased demand.  The prices of petroleum, fertilizers, gold, edible oil, gems & jewellery have increased.  Their demand also has increased.   These lead to a higher value of imports.   Despite a very challenging global environment, measures taken by Government have not only arrested the decline of export, it has also been successful in reversing it.  Anticipating that the situation is likely to be adverse, Government had announced a package on 13th October, 2011.  In addition a strategy paper to double our exports by 2013-14 was released in May 2011.  Earlier measures taken by the Government and RBI include the announcements made in the Budget 2009-10 and 2010-11; in the Foreign Trade Policy (FTP) 2009-14; thereafter in January / March 2010; in the Annual Supplement to FTP released on 23rd August, 2010; and in announcements made in February, 2011.   To increase our share in various export markets and to diversify our market and products, incentives have been provided under schemes viz. Focus Product Scheme, Focus Market Scheme, Market linked Focus Product Scheme and Vishesh Krishi and Gram Udyog Yojana. 

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Increase in Trade Dificit With China

GOVERNMENT OF INDIA

MINISTRY OF  COMMERCE AND INDUSTRY

RAJYA SABHA

STARRED QUESTION NO-203

ANSWERED ON-07.12.2011

a) whether it is fact that trade deficit with China has increased during the last three years;
b) if so, the details thereof and the reasons therefor; and
c) what are the measures before Government for correcting this imbalance?

ANSWER

MINISTER OF COMMERCE AND INDUSTRY
(SHRI ANAND SHARMA)


a) to c): A Statement is laid on the Table of the House.

ANNEXURE

STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (c) OF RAJYA SABHA STARRED QUESTION NO. 203 FOR ANSWER ON 7TH DECEMBER 2011 REGARDING “INCREASE IN TRADE DEFICIT WITH CHINA”

(a)    The trade deficit with China has risen with a dip in the year 2009-10. During the year 2008-09 the trade deficit was US$ 23,144 million. But in the year 2009-10 the trade deficit came down to US$ 19,207 million. The trade deficit during the year 2010-11 was US$ 23,864 million.

(b)    The details of exports to and imports from China during the last three years are given below: -

Bilateral Trade Statistics

(Values in US$ millions)

Year	2008-09	2009-10	2010-11
Exports to China	9,353	11,617	19,615
Imports from China	32,497	30,824	43,479
Trade Deficit	23,144	19,207	23,864

 (Source: DGCI&S)

 Chinese export to India relies strongly on manufactured items meeting the demand of fast expanding sectors like telecom and power in India. Chinese companies supply relevant equipments at most competitive prices. India’s exports are characterized by primary products, raw material and intermediate products. Further there are non-tariff barriers on imports of agricultural products in China as well as limited market access of Indian products.

 (c)    The Government of India has addressed the issue of growing trade deficit at the highest level. At the Ministerial level, we have India-China Joint Group on Economic Relations, Trade, Science and Technology (JEG) where trade related issues are taken up regularly. The Eighth Session of India-China JEG was held on 19th January, 2010 in Beijing. As an outcome of 8th JEG a Memorandum of Understanding on extension of Trade and Economic Cooperation was signed. The MoU recognises that a balanced trade is conducive to long term, sustainable and harmonious development of economic cooperation between the two countries. Indian exporters are encouraged to participate in major trade fairs in China to show-case Indian products in the Chinese market and increase engagement with Chinese companies. Participation of Indian exporters in trade fairs aims to promote Indian products amongst Chinese importers.  With a view to reducing trade deficit, efforts are also being made to diversify the trade basket with emphasis on manufactured goods. We are also pursuing market access issues to tackle non-tariff barriers in the Chinese market at different fora. Business to Business relations are encouraged through schemes such as Market Access Initiative (MAI)/Market Development Assistance (MDA). Apart from these measures the Government of India is alive to the challenges of import surges and various unfair trade practices through available safeguard measures under WTO.


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