Govt pushes China to buy more products from India With Indiaâ€™s trade deficit with China soaring by two-thirds to $40 billion in the last financial year, the government is making efforts to narrow the trade gap by scaling up exports of value-added commodities to the country. The Ministry of Commerce & Industry is sending exportersâ€™ delegations to China almost every month, which are aggressively pushing China to buy more value-added products from India, instead of merely importing intermediary products and raw materials. Rafeeque Ahmed, president, Federation of Indian Exports Organisation (FIEO) is currently leading a delegation of 52 Indian exhibitors to participate in the China Import and Export Fair (Canton Fair), held biannually in Guangzhou. As many as 210 countries had participated in the spring and autumn editions of the Canton Fair which had generated business of $ 74.76 billion in 2011. Ahmed said, â€œThe cost of production in China has gone up 40-50% over the last two years which has opened markets for manufactured products in the country. We have recently started exporting household and lifestyle products to China and are looking at penetrating the country with more high-end products like auto components, pharmaceuticals, handicrafts and readymade garments.â€ Bilateral trade between the two countries stood at $ 75.59 billion in the last financial year. But while Chinaâ€™s exports to India stood at $ 57.51 billion, Indian imports into the country were less than a third at $ 18.01 billion. Chinese exports to India mainly consist of manufactured items required for Indiaâ€™s ever-expanding telecom, power and manufacturing industries, India exports raw materials and intermediary products. In 2010-11, export of non-ferrous metals and iron-ore constituted 50% of Indiaâ€™s export to China. â€œThe problem lies in the fact that Chinese imports are of higher value than the goods that are exported from India which leads to a widening of trade deficit. But we are hopeful within the next five years we will be able to bridge the gapâ€, added Ahmed. Indian heavy industries, for one, rely largely on import of raw materials and finished goods from China. In the last financial year itself, import of electrical machinery and equipment from China went up by 14% to $ 13.52 billion, while import of machinery such as nuclear reactors and boilers increased by 34% to $ 10.35 billion. Similarly, import of project goods increased by 54% to $ 4.9 billion in the last fiscal from $3.2 billion in the year-ago period. Interestingly, in the last couple of years, import of power and telecommunication equipment from China has seen a huge rise. In 2010-11, import of mobile phones and other kinds of wireless phones reached $4.1 billion, up 60% year-on-year from $2.5 billion in 2009-10. Indiaâ€™s main items of export to China include petroleum products, gems and jewellery, transport equipment, other raw materials and machinery. Last fiscal, export of ores, slag and ash to China declined by 3.20% $4.61billion due to slowing production in the countryâ€™s steel sector. Export of cotton, however, more than doubled to $4 billion in the period. India has set up an India-China Joint Group on Economic Relations, Trade, Science and Technology in order to address the issue of widening trade deficit.