{
  "type": "article",
  "title": "Nirmala Sitharaman Reveals How China Routes Indian Goods Through Vietnam to Hide Direct Imports",
  "summary": "Finance Minister Nirmala Sitharaman shed light on the India-China trade deficit, explaining that Beijing purchases large quantities of Indian goods but routes them through countries like Vietnam, keeping them out of India's direct export records.",
  "content": "Whenever trade figures between India and China come under review, a recurring question arises as to why India's exports are significantly lower while imports remain remarkably high. During the previous fiscal year, India faced a staggering trade deficit of approximately 90 billion dollars with China, highlighting a major imbalance where outward shipments lag far behind inward purchases. However, Finance Minister Nirmala Sitharaman unraveled the true reality behind these trade statistics, pointing out that China actually purchases massive amounts of Indian goods. The catch is that Beijing brings in these commodities through third countries rather than importing them directly, which results in these substantial volumes failing to register under India's official export ledger.\n\nBoosting Domestic Manufacturing and Reducing Reliance\nSitharaman stated that the central government has introduced several key announcements in the Union Budget aimed at boosting domestic manufacturing and providing necessary backing to industries so they can cut down their heavy dependence on foreign nations. The administration is actively incentivizing businesses that are keen to transition toward indigenous production and minimize reliance on external sources. She acknowledged that while India's official export data creates the impression that shipments to China are insufficient, certain specific commodities are predominantly sourced from India by Chinese buyers, who then route them through Vietnam. This indirect channel is precisely why these large transactions do not get credited to India's direct export accounts.\n\nThe Technical Reality of Trade Channels\nElaborating on the technicalities, Sitharaman maintained that if India is supplying goods consumed in China, those transactions should technically count as Indian exports, even though the current systemic setup fails to reflect that. Speaking candidly, she admitted that while her remarks might not sound diplomatic or palatable to everyone, India continues to struggle with securing adequate market access in China for high-volume and high-value categories. Pointing to specific examples such as buffalo meat and generic pharmaceuticals, she noted that these high-demand products are extensively bought by China from India, yet they reach the Chinese market through Vietnam or alternate intermediary nations rather than via direct trade routes.\n\nClarifying Welfare Schemes and Digital Payments\nAddressing questions regarding government expenditure, the Finance Minister emphasized that public welfare initiatives and support schemes are implemented after meticulous planning and proper budgeting. She asserted that any program backed by a rightful budget allocation is financially sustainable and should not be sensationalized or dismissed merely as freebies. Turning to digital transactions, she addressed concerns surrounding the proposed Merchant Discount Rate on UPI payments, clarifying that the charge is neither a tax, cess, nor surcharge, and none of its proceeds go to the government treasury. Instead, the fee remains strictly between merchants and payment service providers, ensuring that no financial burden is passed down to ordinary consumers.\n\nWhat this means for you\nThese trade clarifications and policy insights carry direct implications for domestic industries, business operators, and everyday consumers across the country.\n\n• Across India: Manufacturing enterprises seeking to ramp up domestic production will benefit directly from government incentives and budgetary backing aimed at cutting import reliance.\n• For Digital Payments: The proposed Merchant Discount Rate on UPI transactions will not levy any tax or surcharge on consumers, keeping the financial mechanism restricted strictly between merchants and payment processors.\n\nWhy this happened\nThe persistent gap in trade statistics and the high deficit with China stem from specific structural and logistical patterns in bilateral commerce.\n\n• Third-Party Routing: China purchases large quantities of items like buffalo meat and generic medicines from India but routes them through Vietnam rather than importing them directly.\n• Data Discrepancy: Because these goods enter Chinese markets via intermediate nations, the corresponding volumes fail to show up in India's official direct export ledger.\n• Market Access Hurdles: India encounters structural and trade-related barriers in securing direct, adequate access to Chinese consumer markets for several high-volume, high-value product categories.\n\nQuestions & Answers\n\n1. What was India's trade deficit with China in the previous fiscal year?\nIndia faced a trade deficit of approximately 90 billion dollars with China during the previous fiscal year.\n\n2. Which major items does China buy from India through third countries?\nChina purchases large quantities of buffalo meat and generic medicines from India, routing them through Vietnam instead of direct import channels.\n\n3. Will the proposed UPI MDR fee be charged to ordinary consumers?\nNo, the proposed Merchant Discount Rate on UPI transactions will not place any financial burden on consumers and will remain between merchants and payment providers.\n\n4. What steps has the government taken to boost domestic manufacturing?\nThe government has introduced several announcements in the Union Budget to support industries, promote local manufacturing, and reduce reliance on foreign nations.",
  "url": "https://trendkia.com/en/business/nirmala-sitharaman-reveals-how-china-routes-indian-goods-through-vietnam-to-hide-direct-imports-39075",
  "category": "Business",
  "publishedAt": "2026-09-26",
  "tags": [
    "Nirmala Sitharaman",
    "India China trade",
    "trade deficit",
    "Vietnam exports",
    "UPI MDR"
  ],
  "language": "en",
  "site": "TrendKia"
}