This week, Chinese Premier Li Keqiang visited India in his first official overseas trip, vowing to enhance bilateral trade relations and ease tensions in the wake of a recent border dispute between the two countries. In an email interview, Arvind Panagariya, a professor of economics and Indian political economy at Columbia University, explained the recent trajectory of India-China trade relations.
WPR: What is the current state of trade relations between India and China, including the value of bilateral trade, balance of trade and major sectors, as well as the priority both sides place on bilateral trade?
Arvind Panagariya: Bilateral trade between India and China in 2012 was $67 billion. India’s exports to China in 2012 were $18.8 billion and its imports from China $47.7 billion, with a large bilateral trade deficit of $28.9 billion. India’s major exports include iron ore, slag and ash; cotton including cotton yarn and woven fabric; copper and copper manufactures; pearls, precious stones and precious metals; and organic chemicals. Its imports are nuclear reactors, boilers and machinery; electric machinery and sound equipment; organic chemicals; fertilizers; iron and steel and articles thereof; and optical, photographic, precision, medical and surgical instruments. India would like to see its bilateral trade deficit with China shrink and would also like to be able to export more pharmaceutical and information technology products to China.