India raises trade gap issue with China

BALI (Indonesia), Nov 19 (PTI): Raising the issue of a big trade imbalance in favour of China, India Prime Minister Manmohan Singh yesterday told his counterpart Wen Jiabao it needs to be corrected for a "more conducive" business environment even as he invited greater engagement with the world's fastest growing economy. Singh and Wen discussed the issue of "robust" economic ties during their meeting here, as they recognised that it was the "core" of the relationship. The Prime Minister "underlined the need for balanced trade to create more conducive environment pertaining to considerably untapped potential," Secretary (East) in the External Affairs Ministry Sanjay Singh told reporters while briefing on the meeting. The two leaders met on the sidelines of the ASEAN and East Asia Summits. The trade gap in favour of China has been a matter of concern in India, as it is linked particularly to the closed services sector in China. China had a trade surplus of US$ 20 billion with India in 2010. Sanjay Singh said the two leaders expressed happiness over bilateral trade crossing US$ 60 billion mark in 2010. It is projected to touch US$ 70 billion this year. They expressed confidence that the trade target of US$ 100 billion would be achieved by 2015. The Prime Minister welcomed greater Chinese economic engagement with India and mentioned that China was among the partners in executing a large number of projects in India. The two leaders welcomed the holding of first Strategic Economic Dialogue (SED) in September in Beijing last year. At the dialogue, the Indian side was led by Planning Commission Deputy Chairman Montek Singh Ahluwalia. In terms of trade, both the countries are exploiting each other's fast-growing markets while addressing issues like tariffs and non-tariff barriers. India's exports in goods to China have been increasing fast but the services sector is largely closed and talks are underway to address the issue.