Calling for major Chinese investments in India to offset the ballooning trade deficit which now averaged over $35 billion in the last three years, New Delhi on Tuesday sought Beijing's financial and technical collaboration to upgrade its ageing railway network.
"I must, at his stage, mention the growing imbalance in our trade which is a cause of concern in India," Deputy Chief of the Planning Commission Montek Singh Ahluwalia said addressing the third meeting of the high level India-China Strategic Economic Dialogue (SED) in Beijing.
"Trade is an important indicator of economic cooperation and we are happy at the remarkable expansion that has taken place," he said expressing hope that bilateral trade would reach the official target of $100 billion by 2015. We recognise that trade does not have to be balanced between each pair of countries. However, India's trade deficit over the last three successive years has been in excess of $35 billion per annum which is not sustainable."
"It needs to be reduced to sustainable levels by more exports from India to China, and also by Chinese building manufacturing capacities from India for goods it currently export," he said.
On the declining trend, India-China bilateral trade totalled to $66.5 billion last year as Indian exports continued to fall due various reasons including rupee depreciation and reduced iron ore exports.
Indian officials say that the deficit reached such levels that it virtually amounted to India borrowing from abroad to finance the imbalance with China and Chinese recognise that.
Chinese investment in India at present is less than $1 billion.
One way to reduce the imbalance is to open up Chinese markets to IT-enabled services, cotton textiles and home furnishings and also in pharmaceuticals, Ahluwalia said adding that China should step up investments in India specially in the industrial parks to offset Indian losses.
"I hope the Chinese government will help to provide our exports greater access to the market so that the target of $100 billion can be achieved in a more balanced manner," he said.
Describing Tuesday's meeting attended by a host of officials from both sides representing five working groups, as good, he said they moved beyond statements of possible areas of cooperation to statements which are more precise.