New Delhi: India is likely to be soon allowed to export rice to its neighboring country China, following some assurances from the Chinese Premier Wen Jiabao to help India narrow down its large trade deficit with his country, media reports from Rio De Janeiro said, citing an unidentified Indian official.
"The Chinese premier agreed India has a large trade deficit with China and in that context he said rice exports from India would be allowed. He also assured Chinese investments in India's infrastructure," the unidentified official privy to the development said.
The development comes after India's Prime Minister Manmohan Singh met Jiabao during the margins of the 7th G-20 summit in Rio De Janeiro, Brazil, the foreign media said.
"There were some regulatory issues earlier. Our commerce ministry had been working on it. Now these have been resolved as per the Chinese premier," the Indian official told reporters.
Notably, the decision to allow rice export to China was communicated while the two leaders were dwelling on improving bilateral trade between the two countries to $100 billion by 2015, during which Singh pointed out trade deficit between India and China, the Indian official added.
Moreover, the two parties have also agreed to establish an inter-ministerial group within their own country on maritime matters, and also hire officials to hold formal talks on subjects relating to security, trade, navigation, among other issues like piracy, the media reports added.
India's high trade deficit has become a cause of worry for the government, which is likely to negatively impact the country's current account deficit for the current financial year 2012-13.
India and China's bilateral trade last year was a record $73.9 billion, while the trade deficit of the former soared to $27.07 billion even though its exports grew by around 13% to $23.4 billion, government data showed.