India and China have signed a protocol for the export of Indian chilli meal to China, as part of a move to promote “more balanced trade” between the two Asian countries.
This is the eighth agricultural product since 2003 for which India and China have signed a protocol for trade.
The move comes amidst an ongoing trade war between China and the United States, as the latter this week threatened to increase tariffs on approximately $200 billion worth of products imported from China “in light of the lack of progress in the additional rounds of negotiations since March 2019”.
China is India’s largest trade partner and, while there has been a slight reduction in the trade imbalance between the two in the last two fiscal years, there still remains a significant trade deficit.
India has imported $65.23 billion worth of goods from China between April 2018 and February 2019, while it has only exported $15.07 billion worth of goods to the country, data from the Commerce Ministry showed.
In 2017-18, India’s exports to China were around $13.30 billion, while its imports were higher at around $76.40 billion.
Earlier this year, India reportedly submitted a list of 380 products where there is a large potential to improve exports to China. This list reportedly includes agricultural, horticultural, pharmaceutical, textile, chemical and engineering products. Last year, India reportedly stated during China’s trade policy review at the World Trade Organisation (WTO) that the country needed to make serious efforts to remedy its deficit with India, which had been growing.