“Increasing trade deficit with China can be attributed primarily to the fact that Chinese exports to India rely strongly on manufactured items,” said Commerce Minister Nirmala Sitharaman.

India’s trade deficit with China increased to $52.69 billion in 2015-16 from $48.48 billion in the previous financial year, Parliament was informed on Monday.

During the April-September period of 2016-17, the deficit is at $25.22 billion, Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Lok Sabha.

“Increasing trade deficit with China can be attributed primarily to the fact that Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors like telecom and power,” she said.

India is negotiating the Regional Comprehensive Economic Partnership (RCEP) trade agreement keeping in view “its offensive export interests” as well as sensitivities with respect to all participating countries including China, she said.

She added that efforts are being made to increase overall exports by diversifying the trade basket with emphasis on manufactured goods, services, resolution of market access issues and other non-tariff barriers.

Further, the Minister said that as India and China are WTO members, any restrictions imposed on trade needs to be WTO compliant.

No blanket ban can be imposed on China or any other member country under the WTO framework, she added.

Replying to a separate question, she said India’s import of bulk drugs from China stood at $1.63 billion in 2015-16, which constitutes 64 per cent of India’s total bulk drug imports. Overall, India had imported such drugs worth $2.5 billion last fiscal.

“Efforts are being made for revival of (Active Pharmaceutical Ingredient) API industry to lessen dependency on import of key starting materials, intermediates and bulk drugs including from China,” the Minister said.