$100 bn imports, $16 bn exports: Jaishankar says India's economic ties with China 'unfair'

External Affairs Minister S Jaishankar has stated that India’s economic relationship with China has been unbalanced since Indian goods do not have the same market access in China as Chinese products enjoy in India, despite a widening trade imbalance with China.

This is in response to the fact that Chinese imports exceeded $100 billion in FY24 and are still growing in the current fiscal year. However, in the most recent fiscal year, India’s exports hardly made it above $16 billion. China’s imports have already topped $60 billion in the first seven months of 2024, up 10% from $55 billion in the same period the previous year.

During a speech at the Global Centre for Security Policy in Geneva, Jaishankar said that they believed that there has been a great deal of unfairness and imbalance in the economic relationship with China.

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He also added that they don’t have the same market access that they have in India.

In 2022, the Economic Advisory Council to the Prime Minister (EAC-PM) released a working paper that emphasised the many non-tariff hurdles that Indian exporters encounter in China. These barriers restrict the market access for Indian exports, especially those pertaining to pharmaceutical and agricultural items. Any policies that obstruct international trade without including customs tariffs are referred to as non-tariff barriers.

Regarding pharmaceutical exports to China, the EAC-PM study pointed out that, in contrast to other nations, China forbids second-chance testing by an outside laboratory when goods are rejected in a random sampling because of testing-found non-compliance.

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“There is no recourse available, and the lab’s decision is deemed final, thus there is no way to challenge or appeal the findings. According to the report, this has a substantial financial cost for businesses and certain effects on bilateral commerce.

The General Administration of Customs of the People’s Republic of China (GACC) annually lists authorised facilities, and the EAC-PM further noted that exports of grapes and mangoes to China are subject to this listing.

The paper noted that the Indian authorities have submitted a dynamic list, through the Agricultural and Processed Food Products Export Development Authority (APEDA), that can be verified online, showing products registered after a stringent recognition process by APEDA and the National Plant Protection Organization (NPPO). However, the list must be resubmitted every year, followed by additional requirements for video inspections.

According to the EAC-PM, the GACC’s yearly re-registration process and the publication of the approved facilities list on their website lead to duplication of work, delays, higher transaction costs, and trade barriers for Indian mangoes and grapes.

The documents notified by China at the WTO, which contain their norms and rules, are either inadequate or written in Chinese, which presents a significant problem for Indian exporters operating in China, as the EAC-PM also pointed out. The study proposed that China adopt the English, French, and Spanish languages that the WTO has notified as a means of lowering these costs.

When China issues notifications on sanitary and phytosanitary (SPS) and technical barriers to trade (TBT), it frequently fails to clarify the product category to which it is referring. Due to this, Indian exporters are forced to spend more time and money on document collection and translation from several sources.