Even as India levied higher duties on iron ore and cotton, two major raw materials it exports to China, exports to the middle kingdom increased 75 percent during the first quarter 2010. Subsequently Chinese exports to India rose 38 percent during the same quarter. Statistics revealed by the Chinese customs also show bilateral trade between India and China ballooned 66 percent during the first quarter 2010 touching US$14.14 billion, against US$ 9.3 billion in Q1 2009, inching closer to the trade target of US$60 billion. The growth in bilateral trade shrunk India’s trade deficit with China to US$2.5 billion in Q1 2010 as compared to US$2.7 billion in Q1 2008, when bilateral trade was high.
Shipments of Indian cotton, yarn, fabric, copper, precious stones, metals and plastics contributed to the spurt of Indian imports into China. Besides raw materials, India is also trying hard to cultivate a market for pharmaceuticals, agro products and Information Technology in China for which they have organised several trade fairs and exhibitions across the country (for further information on these specific events and how you can participate please write in to [email protected]). China which is India’s largest trading partner saw increased exports of machinery, electrical machinery, iron and steel and vehicles other than railways, during the same quarter into India. The Indian government is subsequently interested in China investing into India’s infrastructure and other high growth sectors.