Indian and Chinese firms signed 21 agreements officials said were worth a total of more than USD 22 billion in Shanghai on Saturday, witnessed by visiting Prime Minister Narendra Modi.
"Let us work together in mutual interests," Modi told executives from 200 Chinese and Indian companies at the signing ceremony. "Now India is ready for business."
China is India`s biggest trading partner with two-way commerce totalling USD 71 billion in 2014. But India`s trade deficit with China has soared from just USD 1 billion in 2001-02 to more than USD 38 billion last year
India's exports to China fell one-fifth to USD 12 billion in the 2014-15, while imports rose to USD 60.4 billion, widening the trade deficit to more than USD 48 billion.
In the foreign trade policy statement released in March, the department of commerce had cautioned that India's trade deficit with China could nearly double to USD 60 billion by 2016-17 if the duo does not address market access constraints and non-tariff barriers faced by Indian goods in China.
"If the current situation persists, by 2016-17, merchandise imports from China will exceed USD 80 billion while India's exports will be around USD 20 billion, leaving an unsustainable trade deficit of USD 60 billion," the Commerce Department said.
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