North-East Asia

North-East Asia

Accounting for over 16 percent of India’s total trade, North East Asia is important for India and includes China, a major trading partner. India’s trade with the North East Asia region, comprising China, Japan, Hong Kong, Taiwan, The Republic of Korea, the Democratic People’s Republic of Korea, Macao and Mongolia, stood at USD 125.1 billion in 2013-14. Trade with China (USD 65.9 billion), Hong Kong (USD 20.1 billion), Japan (USD 16.3 billion) and Korea (USD 16.6 billion) constitute the major chunk of India’s trade volumes with this region. India has Comprehensive Economic Partnership Agreements with the Republic of Korea and Japan.

India has also been impacted by globalization. As a consequence of the outward looking economic policies that India adopted in the course of economic reforms initiated in 1991, India’s integration with the world economy is progressing at a significant pace even though not yet complete.

Exports to NEA countries were USD 30.84 billion (11.76% of India's exports) and imports from NEA countries were USD 94.11 billion (24.7% of India's imports). India's trade deficit with NEA countries in 2015-16 stood at USD 63.28 billion which is 53.3% of India's total trade deficit (USD 118.72 billion).

Three countries of this region, namely, China, Republic of Korea and Japan are participants in the RCEP negotiations. Japan is part of the group of countries negotiating the Trans-Pacific Partnership Agreement, which the Republic of Korea also wants to join. A characteristic common to India’s trade relations with these three countries is a high trade deficit. China accounts for over a quarter of our trade deficit. India’s imports include manufactured items in both ‘non-essential’ categories and capital goods in sectors such as Power and Telecom.

Market access and non-tariff barriers block India’s exports of pharmaceuticals, IT& ITES, agro commodities etc. India’s IT Services are unable to make a breakthrough in China’s highly controlled and, at times, opaque SOE (State Owned Enterprises) business. As far as India’s economic relations with the Republic of Korea and Japan are concerned, analysis indicates that the projected gains for India from the CEPAs with these two countries have not materialised as per expectations.

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