Bilateral trade between India and China have grown in the last decade but recent trends suggest that the aim of taking it to the $100 billion figure by 2015 is unlikely to be fulfilled, S Jaishankar, Indian ambassador to China, has said.
After touching an all-time high of $73.9 billion in 2011, trade between the two neighbours - heavily tilted in China's favour in the first place - has been sharply falling.
"In 1995, trade turnover was only $1.16 billion. Even as late as 2003, it stood at $7.6 billion. Thereafter, it took off, peaking at $73.9 billion in 2011. We have hopes of crossing the $ 100 billion-mark by 2015 although recent trends are not encouraging. A combination of global slowdown and sectoral challenges has brought trade down to $66.6 billion in 2012. Figures up to May 2013 point to a further 26% decrease in India's exports, mainly in iron ore, copper and cotton," Jaishankar told members of the China Top 500 Enterprises Club, affiliated to the government.
The added issue of trade imbalance is adding to bilateral trade woes. Though China repeatedly claims that it would address the issue, nothing is actually been done.
"Clearly, we need to find some remedies to this imbalance quickly. Promises to import more from India are wearing thin in the absence of action," the envoy said.
"In the case of pharmaceuticals, Chinese product approval timelines that used to be 3-4 years have now been further extended," Jaishankar said, adding that limitations here on generic versions of innovator drugs make hospital listing harder.
In the case of Indian IT companies, layers of security clearance and hard tax laws discourage them from coming into China.
"Our agro-product negotiations are perhaps symbolic of the state of commerce. After more than a decade of negotiations, only 3 out of 17 items on the table have cleared the phyto-sanitary barrier," he said.
"The contrast with the situation in India, where Chinese products enjoy relatively unrestricted access, cannot be sharper," the envoy told the business gathering.
Chinese companies have significant market shares in power generation and telecommunications; India, in fact, is China's largest overseas market for project exports.
"But there are also challenges that Chinese industry confront in India, including the impact that variable quality may have on their reputation. Equally important is the maintenance and upkeep of equipment already supplied to India. Chinese companies need to do more, including setting up service centres in India, if they expect second generation orders," the ambassador added.