China has on Monday, rejected India’s proposal to carry out trade sector in local currencies, which was aimed directly at the bridging of the ballooning trade deficit (shortage) with the neighbouring country.
When looked at the rate of India’s export to China, it was at only $13.4 billion, whereas imports aggregated to $76.4 billion in the session 2017-2018, which has left the deficit of $63 billion. In 2016-2017 the rate was $51.11 billion.
To boost China’s export, India has suggested China to renminbi-rupee trade, and also to handle the widening of trade deficit concern. India’s official said, “They have not accepted the proposal.”
Afterwards, in an inter-ministerial meeting, the issue has been discussed which was held in October. During the meeting, it has been suggested that the Department of Economic Affair and Reserve Bank of India (RBI) would look after the possibilities of enhancing and exploring the renminbi-rupee trade with the China.
Including Iran, Russia and Venezuela, India has suggested the same method of national currencies trade with these countries. India suffers with trade deficit with these country too, besides China.
The Federation of Indian Export Organization (FIEO) president Ganesh Kumar Gupta has also said and suggested India to promote exports in its domestic currency from India. Gupta said, “This will help in bridging trade deficit with countries like China.”
Trade experts has noted that trade deficit with countries, with which India has a trade balance, can only bring help to India.
A professor at Jawaharlal Nehru University (JNU), Biswajit Dhar said, “Trade imbalance should not be there with the country with which we want to do trade in rupee. It will not help in bridging the deficit. The partner country should have an opportunity to invest in India to use the rupee.”
Recently, China has allowed India to export raw sugar and rice to China. However, India is looking forward to export pharmaceuticals, services as well as engineering also to China.