Finance Minister Nirmala Sitharaman on Friday said China’s non-tariff barriers are the biggest hurdle for Indian exports, alleging that Beijing has denied market access to Indian products despite significant demand potential, including for generic drugs, bovine meat and agricultural produce, leading to a widening trade imbalance.
“A decade has gone by consistently putting up a case for market access for Indian products but non-tariff barriers has been very strong and China uses non-tariff barriers unhesitatingly. Non-tariff barriers is the biggest hurdle in the trade between India and China,” Sitharaman said during a conversation hosted by the Atlantic Council on the sidelines of the International Monetary Fund-World Bank annual meetings in Bangkok.
Pointing out that India’s trade imbalance with China has grown exponentially, Sitharaman said India had repeatedly sought market access for products in which it had a competitive advantage, but progress had been limited despite scope for discussions on sanitary and phytosanitary measures and other regulatory issues.
India’s trade deficit with China has more than doubled to $112 billion in FY26 from $52.7 billion in FY16.
Sitharaman’s comments come days after Trade Minister Piyush Goyal’s remark that India is working to develop relations with China “once again”, while cautioning that the last word has not been written on this journey yet.
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“I think we had some concerns in the past. We are working to develop relations with China once again, but the last word has not been scripted on this journey,” Goyal said on Wednesday at the Bloomberg New Economy Forum.
The finance minister said India had refrained from adopting punitive trade measures to address its trade imbalance with China, preferring negotiations despite the difficulties involved, unlike the approach followed by some countries.
“Probably that's not the way India believes in dealing with trade negotiations. We sit and talk. It is sometimes very tiresome but we do go through that approach rather than putting countervailing duties or some non-tariff barriers to counter their non-tariff barriers,” Sitharaman added.
Sitharaman also called for a review of India’s trade agreement with the Association of Southeast Asian Nations (Asean), arguing that its benefits are skewed in favour of the latter.
More than a decade after the agreement was signed, India needs to assess its impact on domestic manufacturers and importers, she said.
“We need to have that agreement continue but in a slightly refashioned manner. It cannot so adversely affect one side which is the Indian side,” she said.
India’s trade deficit with Asean countries crossed the $50 billion mark in FY26.
Sitharaman also defended India’s decision to stay out of the Regional Comprehensive Economic Partnership (RCEP), saying the government had not perceived sufficient gains from joining the trade framework.
“We took a conscious call to stay out of RCEP because we didn't think it was going to do any help for us,” she said.
Sitharaman said Indian exporters had managed to turn global trade disruptions into opportunities by identifying alternative markets, including countries that had imposed high tariffs on Indian goods.
India’s exports of goods and services grew 23 per cent in September, she said, citing the performance as evidence of exporters’ resilience amid a difficult global environment.
“Even in this situation Indian exporters have found very many different alternative markets — and even to markets which have literally levied huge tariffs on us — we have reached these markets and very efficiently,” she said.
The finance minister said India remained committed to multilateralism but was accelerating bilateral trade agreements rather than waiting for progress in the global trading system.
“We believe in multilateralism. However, given today's environment we are very keen that we build our strength in trade through bilateral agreements as well,” she added.
She cited India’s trade engagements with the European Union, New Zealand, Australia and the United Arab Emirates, as well as negotiations with Canada, saying political will on both sides had helped move long-pending negotiations forward.
On the India-US trade negotiations, Sitharaman said she hoped an agreement would be concluded soon, following recent comments by Commerce Minister Piyush Goyal.
“I hope in the interest of global trade and in the interest of trade between the two partners India and US the trade agreement gets concluded at the earliest,” she said.