Barthwal was responding to queries from media persons on whether India was looking at easing the investment rules for Chinese companies to reduce the trade deficit with Beijing, as suggested by the Economic Survey.
“The Department for Promotion of Industry and Internal Trade (DPIIT) is looking into what should be the revised FDI policy and they are working in that direction. They are also doing stakeholder consultation. Once they take a position on FDI, that will be a better way of looking at it,” Barthwal said.
Local as well as Chinese companies have been pitching for some relaxation in the investment norms that were tightened during the Covid-19 pandemic. New Delhi recently set up a centralised portal for fast-tracking visa approvals to Chinese technicians.
Govt looking at revising FDI policy, monitoring situation in Dhaka: Trade secretary
The Economic Survey, tabled in Parliament in July, suggested that increased FDI inflows from China can help in increasing India’s global supply chain participation while lifting exports.
In June 2020, New Delhi made prior approval mandatory for foreign investments from countries that share a land border with India—China, Pakistan, Nepal, Myanmar, Bhutan, Bangladesh and Afghanistan—to curb opportunistic takeovers of domestic firms following the pandemic.
Hard to Decouple from China
Asked about the reasons behind the increase in imports from China, Barthwal said no country in the world had been able to decouple from China, not even the United States and the European Union.
His statement assumes significance against the backdrop of exports to China falling 9.44% to $1.05 billion in July even as imports rose 13.05% to $10.28 billion.
He said India is one of the fastest growing major economies of the world and its consumption is also surging.
“If imports are increasing commensurately with exports or with domestic consumption, I think that is not something which we should worry about,” Barthwal said.
China has emerged as the largest trading partner of India with $118.4 billion two-way commerce in 2023-24, edging past the US. India’s exports to China rose 8.7% to $16.67 billion in the last fiscal.
Bangladesh Trade Ties
Barthwal said India was monitoring the situation in Bangladesh and taking steps to improve the cross-border trade between the two nations.
Domestic exporters have expressed concerns over the political crisis in Bangladesh, saying developments in the neighbouring country would have implications on bilateral trade.
The commerce secretary said that the situation in Bangladesh is improving fast and “whatever disruptions were there, they have been largely addressed”.
“We also believe that between India and Bangladesh, there should be improvement in trade,” he said.
India’s exports to Bangladesh in July rose 11.13% to $803.52 million.
“We want trade relations to be restored… we are watching the situation. It will be premature to say how things will change,” Barthwal said.
