The rising trade deficit between India and China have the Indian officials taking a more realistic look at what needs to be done to bridge the widening gap. While Indian firms are being prodded to align themselves with the Chinese situations, Beijing is urged to give a level-playing field in areas such as pharmaceuticals and information technologies vis-à-vis Chinese companies.
The Chinese also remind Indian side that the export basket has to be expanded to strike a balance between "word's office" India and "world's factory", China even as both sides are staying on course to achieve the trade target of 100 billion US $ soon. China is India's largest trading partner in goods.
As per the latest available Indian figures, in the first 8 months of 2011, India-China bilateral trade reached US$ 48.17 billion, which is 19.47% over the same period last year.
While India's total exports to China for this period were US$ 15.68 billion (+7.37%) and China's exports to India reached US$ 32.49 billion (+26.33%). The trade deficit for the first 8 months has already reached US$ 16.8 billion. The Chinese figures put the bilateral trade for last year over 70 billion US $.
India has been demanding market access for its as pharmaceuticals and information technology products. "Indian companies have to do more. So is the Chinese side", says Dr S Jaishankar, India's ambassador to China.
The Indian officials say that the Indian firms need to adapt to the domestic situations in Chin and there success elsewhere is no guarantee to the Chinese welcoming them. In the pharmaceutical sphere, the Chinese have stringent rules, and for example, they don't accept the datas for clinical trials done elsewhere.
The Indian envoy points out that the cheap pricing cannot be the only reason for getting entry into a complex market like that of China.
The Chinese officials say that they are giving a level-playing filed to India. They said that expect the advanced markets like that of the US and the European Union, trade with most countries leaves a trade deficit in favour of China. Says Liang Wentao, deputy director general at the Chinese Commerce Ministry "The trade imbalance doesn't help China in the long run. We are giving a level-playing filed to Indian firms. Indian companies have to export more finished goods to get a balance in the trade."
But Indian officials feel that the level-playing field should mean, level playing filed with the domestic Chinese firms and not with the foreign companies.