India's Trade Balance Problems with Chi…

Stung by a rapidly widening trade deficit with China and Beijing’s continued rebuff of Indian attempts to reset the equation, the Congress-led government is fleshing out a draft action plan to seek combat its Asian rival. India’s trade ministry has consistently raised “serious concern” that the India-China deficit may become unsustainable. India’s trade deficit with China is forecast to balloon to US$278.5 billion by 2014, a 20-fold increase from US$14.3 billion in 2004. At US$40.8 billion, Chinese exports to India were nearly double the US$ 20.8 billion in Indian exports to China, mainly driven by cotton and iron ore.

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