India's Trade Deficit With China: Goyal Slams Previous Govt

Washington, Oct 4 (PTI) At a time when the entire world recognises that China is a non-transparent and opaque economy, some people, possibly responsible for its growing influence in the Indian industry, are choosing to continue to praise or defend the China story, Commerce and Industry Minister Piyush Goyal has said.

Slamming the previous Congress-led government, he said it is a matter of "shame" that India allowed substandard and opaquely-priced Chinese goods to flood the Indian markets and kill Indian manufacturing.

"As regards China, it is very sad that some people, possibly responsible for the growing influence of China in the India industry, are choosing to continue to praise or defend the China story, whereas the whole world today recognises that China is a non-transparent and opaque economy," Goyal told Indian journalists at a news conference here on Thursday.

He was responding to a question on recent remarks by Leader of Opposition in the Lok Sabha Rahul Gandhi during his US trip last month, alleging that countries like the United States and India are responsible for China emerging as a manufacturing hub and the current Indian government has not done enough towards addressing the Chinese manufacturing challenge, resulting in the unemployment problem in the country.

"I can only sympathise with the lack of knowledge about the Indian manufacturing story because I do not know which of those job losses he (Gandhi) is talking about. But we are on foreign soil. We are not like Rahul Gandhi, who brings domestic politics to foreign lands. He is entitled to berate his own country, that is a matter of his choice," Goyal said.

"As far as we are concerned, all of India is united in its effort to improve the prosperity of our people. We are all working towards a developed nation, a prosperous nation by 2047. Viksit Bharat 2047 is our goal, our vision, our mission, our commitment. We are all together in making the lives of the people of India better in the years to come," he added.

Goyal said China is known for dumping goods.

"Even the US is concerned about it. The US is imposing extra taxes and duties on Chinese goods. The US is concerned about the security threat from Chinese goods and imposing restrictions on that," he said.

"Whereas, if you look back, and I am only giving this as a matter of statistics with no intention to politicise, India only had a trade deficit of about USD 1.7 or USD 1.8 billion in 2004 with China. What happened between 2004 and the next two, three, four years is something for the press to find out. But between 2004 and 2014, our trade deficit went up from USD 1.8 billion to USD 43 billion in 10 years, by nearly 30 times," Goyal said.

He said it is a matter of "shame" that India allowed "Chinese goods, substandard goods, opaquely-priced goods, non-transparent goods to flood the Indian markets, to kill Indian manufacturing, to almost get investors disinterested in the India story because there was no protection against these kinds of goods coming in from China. Import duties were reduced during that period".

Goyal said India, which was not a part of the RCEP, was taken into the RCEP forcibly, which was really getting India to do a free-trade agreement (FTA) with China.

"Twelve out of those 15 countries, we already had an FTA. With Australia, we were at an advanced stage of negotiation even at that time. But we aborted it because we thought we would do and get into ourselves... Who stayed in 15? Only China. Those 15 were merely making an agreement. India was forced to join that group into the RCEP by an executive action of the then government," he said.

"They forced India into the RCEP negotiation. You will all appreciate, it basically was getting India to do an FTA with China. Imagine what that would have cost India. Look at the import duties, how they have been reduced from four to 14, which helped China dump goods into India," he said.

"Our trade deficit increased from 2004 to 2014 at a compounded annual growth rate of 42.85 per cent. CAGR of 42.85 per cent. If that did not kill manufacturing, what did? Whereas from 2014 to 2024, our trade deficit with China grew only by 6.45 per cent. It is chalk and cheese. Whereas the trade deficit in 10 years, in our time, barely doubled, it grew by 30 times, 3,000 per cent, in those 10 years," the senior leader from the ruling Bharatiya Janata Party (BJP) said.

"It is extremely sad that certain governments who are responsible for this problem in the first place do not even recognise and understand how they have hurt and damaged the India growth story," Goyal said.