30 Billion Dollar of India-China Trade Deficit in First two quarters of Financial Year 2021-22
- India’s trade deficit with China stood at $30.07 billion during April-September 2021 as per Union Ministry of Commerce and Industr.
- India’s exports to China during this period was 12.26 billion dollars
- India’s imports from China during this period was 42.33 billion dollars
- Imports from China had increased from $60.41 billion in 2014-15 to $65.21 billion in 2020-21, exhibiting an increase of 7.94% over six years.
- However, the imports were static between 2019-20 and 2020-21 due to Indian governments sustained efforts to achieve a more balanced trade with China, including bilateral engagements to address the nontariff barriers on Indian exports to China.
- As per ministry, Schemes like the production linked incentive scheme will help promote domestic manufacturing capacities and attract investments and reduce dependency on imports from China
Union Minister of Commerce and Industry – Shri Piyush Goyal
Balance of Trade and Trade Deficit
The balance of trade, commercial balance, or net exports, is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance of trade for goods versus one for services. The balance of trade measures a flow of exports and imports over a given period of time. The notion of the balance of trade does not mean that exports and imports are "in balance" with each other.
If a country exports a greater value than it imports, it has a trade surplus or positive trade balance, and conversely, if a country imports a greater value than it exports, it has a trade deficit or negative trade balance.
Production Linked Incentive (PLI) Scheme
PLI scheme is an initiative that provides incentives to domestic industries to boost local production. Through this, specifically tailored products emerge that satisfy a base target customers. Domestic businesses also help in cutting down import bills. As per the PLI scheme, the government encouraged domestic companies and establishments to set up or expand on manufacturing units to increase production, to which the government provides incentives on incremental sales.
Tariff and Non-Tariff Barrier
Tariff barriers are the tax or duty imposed on the goods which are traded to/from abroad. On the contrary, non-tariff barriers are the obstacles to international trade, other than tariffs like quotas. These are administrative measures implemented by the country’s government to discourage goods brought in from foreign countries and promote domestically produced items. Both of these are collectively known as trade barriers.
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