India’s exports of cotton textiles have reduced its trade deficit with China. Exports of cotton textiles from February to April 2019 increased 69 per cent over the same period previous year. China is an important trading partner for India and imported $65.22 billion worth of goods and exported goods worth $15.10 billion for this period, recording an all-time high in exports and sharp decline in imports from China. The trade balance between the two countries in the year 2017-18 was $63.05 billion in favor of China, which has now lowered to $50.13 billion.

Among the few items in which India is more competitive than China is cotton based textiles like yarn, fabric and made-ups. Exports of cotton textiles from India can increase further if the tariff disadvantage of 3.5 per cent to 10 per cent suffered by India in comparison to Vietnam, Pakistan, Indonesia etc on textile products is addressed by making special efforts. Higher exports of cotton textiles including fabrics and made-ups can not only contribute to the significant reduction of trade imbalance but also lead to attracting investments from labor intensive industries shifting out of China.