India expects exports to China to pick up in 4-5 months: source

According to sources, India’s Ministry of Commerce expects exports to China to increase in the next four to five months on the back of sea products and supplies of gemstones and jewelry as the government takes measures to tackle the country’s growing trade deficit.

“Efforts are ongoing. We achieve trade missions through events. With China, the seafood challenge is now gone and exports are increasing. The shrimp faced many challenges as exports stagnated. All of that is now removed,” said a senior government official.

China suspended imports from 99 Indian seafood processors and exporters in 2020 over Covid concerns. Constant dialogue, efforts by the Marine Products Export Development Authority (MPEDA) and the post-Covid opening up of China’s economy resulted in the suspension being lifted in 2023. India exports frozen shrimp, fish, squid, cuttlefish, dried products, live and chilled products. Of these, frozen shrimp is the largest marine export to China.

Gem and jewelery exports to China are also increasing. The Chinese market is slowly picking up and opening up the Chinese economy will help Indian exports, the official said.

The Department of Commerce is conducting an internal assessment of all other sectors to analyze why their exports to China have declined.

“We are looking at how much of the decline in exports to China was due to the Covid shutdown, how much was due to the non-Covid shutdown and whether there are different signals given the market opening,” the source said. “For this fiscal year, in four to five months we will assess the trend of exports to China, identify export impulses and assess whether the plan to reduce the trade deficit is going in the right direction. We will also see how the export will develop in 4 to 5 months in terms of orders and shipments and make another strategy,” he said.

According to the Ministry of Commerce, India’s trade deficit with China widened in FY23 due to a rise in imports and a fall in exports. Exports to China fell 28 percent to $15.3 billion in fiscal 23, while imports rose 4.16 percent to $98.51 billion last fiscal year. The trade deficit widened to US$77.6 billion in FY23 from US$72.9 billion in FY22.

Imports from China have increased as the country supplies key commodities, including active pharmaceutical ingredients (APIs) and renewable energy.

China is the world’s largest producer and exporter of APIs and many Indian pharmaceutical companies depend on importing the ingredients to manufacture various formulations.

“However, if China exports intermediate products and we add value and export them, then there is no problem,” the official said.

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