Tapping this export opportunity can substantially reduce India’s trade deficit with China

Chinese market holds an annual untapped potential of USD 82 billion in 20 goods where Indian exporters have competitive advantage, reveals latest data from Geneva-based International Trade Centre (ITC), the only multilateral agency committed to the mission of internationalizing small and medium enterprises.

These 20 goods, which are mentioned in the following table along with their 8-digit internationally accepted customs code, belong mainly to the organic chemicals, plastics and articles, engineering, iron & steel and agricultural sectors.

According to an analysis by MVIRDC World Trade Center Mumbai, India meets hardly 3.3% or USD 2.7 billion of the total annual import demand of USD 82 billion for these 20 products in China (figures are for 2018). India has a competitive advantage in these products as we export USD 15 billion worth of these goods to the world, which is 4.5% of our annual exports. These goods constituted about 17% of India’s exports to China in 2018. India can substantially reduce its trade deficit with China, which stood at USD 53.56 billion in 2018-19, by enhancing its market share for these products in that country.

Goods Posing Export Opportunity for India in China (USD Million)

HS Code Product Description China's Imports from the World (2018) India's Exports to China (2018) India's Exports to the World (2018)
29024300 p-Xylene 16,942 1,334 2,626
29053100 Ethylene glycol (ethanediol) 9,082 213 291
39012000 Polyethylene 8,826 260 370
84798999 Other machines and mechanical appliances 6,936 5 215
85177090 Electrical equipments 5,579 24 171
85389000 Electrical equipments 4,406 15 479
2023000 Frozen boneless bovine meat 4,240 0 3,323
39021000 Polypropylene, in primary forms 4,191 183 864
29012100 Ethylene 3,302 121 225
72024100 Ferro alloys 2,686 274 927
88033000 Parts of aircraft 2,271 15 1,638
84073410 Engines and other auto-components 2,264 0.009 166
29022000 Benzene 2,191 248 1,313
84839000 Machinery, Mechanical Appliances and their parts 2,126 3 169
29339900 Heterocyclic compounds 1,695 20 773
85369090 Electrical Machinery and equipments 1,212 8 221
84149090 Machinery, Mechanical Appliances and their parts 1,142 13 276
12074090 Sesamum seeds 1,067 8 508
24012010 Tobacco and tobacco products 1,039 1 406
72104900 iron and steel products 984 0.006 484
Total 82,182 2,745 15,447

Source: ITC, Geneva, compiled by MVIRDC WTC Mumbai

Speaking about the market opportunities for Indian exporters in China, Ms. Rupa Naik, Senior Director, MVIRDC World Trade Center Mumbai said, “In order to realize this untapped export potential, India and China must exchange trade delegation with members from these identified sectors. We must also create awareness on this opportunity among India’s micro, small and medium enterprises producing these identified products.” Increasing our market share for these products in China will add further momentum to the growing exports of India in this country. India’s overall exports to China grew 5.39% to USD 11.57 billion in April-November 2019, even as our total exports to the world declined 2.0% during this period. India’s overall trade deficit with China declined 5% to USD 35.3 billion in the first eight months of the current financial year compared to USD 37.3 billion in the year ago period.

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