India and China have failed to meet the ambitious $100 billion target set by both the countries for 2015, according to import-export data released in Beijing on Wednesday.
Instead, according to Chinese General Administration of Customs (GAC) data, India's large trade deficit to China has touched a record $45 billion, underlining an increasingly lop-sided trade relationship that has begun to strain bilateral ties.
Bilateral trade between the two countries reached $71.63 billion in 2015, failing to meet the $100 billion target. This marked a slight increase from last year's $ 70.59 billion figure.
Of this, Indian imports from China accounted for as much as $ 58.25 billion, showing a 7.4 per cent increase, while Indian exports to China fell by 18.2 per cent to $ 13.38 billion.
The GAC said China's overall foreign trade surplus for the year widened to $ 562 billion, up 56.7 per cent from the previous year. The numbers underlined the growing strains in China's trade, with exports falling by 1.8 per cent on account of slow global demand and imports declining as much as 13.2 per cent, reflecting the slowdown in the Chinese economy.
India's trade deficit of $ 44.87 billion will add further strains to the trading relationship. While China became India's biggest trading partner in 2011, the deficit has since continued to widen, fuelling an increasing number of anti-dumping disputes.
While India imports Chinese machinery in sectors from power to telecom and infrastructure, exports to China have largely comprised unfinished products, such as iron ore and chemicals.
The increasingly lop-sided trading figures are in part due to the slump in Chinese demand for ores, as the country deals with a slowdown coupled with excess capacity in several sectors, especially in the steel industry, and also due to mining bans in Orissa and Goa that have led to Chinese firms looking elsewhere for ore imports.
To narrow the trading gap, the Narendra Modi government has since taking office pushed Beijing for greater market access for Indian information technology and pharmaceutical companies.
To check dumping of cheap Chinese imports, the government of India announced certain measures, including hiking the import duty in December, to make sure that steel companies aren't much worse off than they already are (See: India slaps anti-dumping duty on certain stainless steel products).
The efforts have so far had limited results, Indian officials say. While there is greater inclination among provinces in China to do business with India - Indian IT companies have recently signed agreements to undertake large-scale projects in the southern province of Guizhou - companies have generally struggled to make inroads as far as China's large state-owned enterprises are concerned, barring some contracts with Chinese banks.
Both countries last year set up a high-level task force to deal with economic issues including the trade deficit, but officials said it has so far made little headway.