Restrictive measures applied by Beijing are narrowing the entry points available to Indian exports in Chinese markets, Finance Minister Nirmala Sitharaman told reporters on Friday, with the gap in bilateral trade having expanded over time — a dynamic she described as a point of friction between the two neighbouring economies.

At a sideline session with the Atlantic Council during the IMF meeting in Bangkok, Sitharaman pointed to trade imbalances and non-tariff barriers — including phytosanitary regulations governing plant health standards — as persistent obstacles in commerce between India and China. She stated that the deficit in bilateral trade had been widening and that such regulatory measures posed the foremost impediment for Indian exporters, according to media reports.

The statement identified certain product categories — among them generic pharmaceuticals, beef, and vegetables — as facing ongoing barriers to entry in a mainland market seen as holding considerable commercial promise.

Those remarks came after External Affairs Minister S Jaishankar's observations earlier in the week, in which he stated that Indian businesses do not operate on equal terms in China. That assessment was set against the deterioration in ties between the two countries following a deadly border confrontation in 2020, which triggered a period of diplomatic strain and tightened restrictions on Chinese capital flows into India.

Diplomatic steps taken by Prime Minister Modi and President Xi to steady bilateral relations and defuse friction along their shared border have not closed the gap in economic standing between the two countries. The bilateral trade gap between India and China has surpassed $100 billion so far this year, with Sitharaman noting that New Delhi has held back from deploying non-tariff barriers or countervailing duties in response.

Turning to wider trade matters, Sitharaman described India's existing agreements with Southeast Asian countries as heavily weighted against New Delhi's interests. India's commitment to the ASEAN trade agreement remains intact, she said, though she indicated the existing terms require renegotiation.

At the briefing, the finance minister pointed to the country's continued dependence on overseas supplies of crude oil and fertilisers, even as the broader economy has held its position as the fastest-expanding among large nations. She described the cost of importing those commodities as both large and rising, with the outflows placing pressure on foreign exchange reserves.

Downward pressure on the rupee throughout the year has been linked to three converging factors: a heavier bill for imported oil, outflows draining domestic investment pools, and the pull of strengthening yields on American government bonds. The Reserve Bank of India drew on three distinct instruments to address the strain: selling dollar holdings into the open market, tightening regulatory conditions around currency derivative contracts, and establishing a separate facility through which state-owned oil companies could access foreign exchange.

Those policy-driven recoveries have kept the rupee away from its lowest recorded levels, yet the underlying economic strains have not eased.