India’s trade deficit with China soared during UPA govt, says Piyush Goyal

Pune: India's trade deficit with China jumped significantly when the Congress-led United Progressive Alliance was in power, Union minister of commerce and industry Piyush Goyal said on Thursday.
"I wonder what happened after 2004 that China became India's biggest trading partner. The ruling party at that point of time had some secret meetings and agreements. And India started drastically reducing all import tariffs on a most favoured nation basis for countries, including China, which was a non-market economy," he said while speaking at Asia Economic Dialogue in Pune.
Between 2004 and 2014, India's trade deficit grew at a compounded annual growth rate of 45% — from $2 billion (around Rs 17,318 crore) to $40 billion (around Rs 3.5 lakh crore), he said.
Goyal further said, "It is a question as to what memorandum of understanding Congress entered into with China. I hope Rahul Gandhi will give a clarification on this at some point of time and tell the country what the agreement (with the Chinese) was that for which our trade deficit during their govt increased by 45% each year. The country will thank him and Congress if they clear this mystery."
India's trade deficit with China was around $85 billion (around Rs 7.4 lakh crore) in 2023-24 financial year, as per commerce ministry data.
He said goods coming from non-market economies such as China are substandard and come through predatory pricing. "Consumers get addicted to it like opium. And getting out of that addiction is a long process. What we are trying to do is de-addict from that low-cost, substandard goods that have flooded the market."
Govt became strict on quality control as it increased the number of quality control orders to 700 by 2024 from 106 in 2014, the minister said. "My hope is that I have 10,000 quality control orders. India should accept if we are to become a developed nation, quality is the one factor that will determine our success."
On trade relations with the US, Goyal said India and the US are complementary economies with each having its own strengths. "What we are going to attempt to do is ensure that we have fair trade."
Goyal said industries cannot survive for long by relying on subsidies and tariffs, but they are useful to kick-start a growth trajectory.
On Tesla's investment in India, Goyal said everybody is welcome. "India has its own laws and regulations, FDI policy. Any company can come to India through the policy except those entities belonging to countries that are inimical to India's interest or do not support India's interests."
US president Donald Trump recently said any investment by the US-based electric car maker in India will be unfair to US interests.