MC EXCLUSIVE China market access remains slow; balancing imports, make in India key to narrowing trade deficit, says FM Sitharaman

Finance Minister Nirmala Sitharaman

• India's market access for goods in China is progressing slowly
• Trade deficit with China reached a record $116.12 billion in 2025
• Possible changes to Press Note 3 are under discussion to spur investments

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India’s efforts to secure better market access for its goods in China are progressing slowly, Finance Minister Nirmala Sitharaman said in an interview with Network18 Group Editor-in-Chief Rahul Joshi.

In the first interview after presenting the Budget on February 1, Sitharaman said that capacities in India need to be increased sooner, but improving market access in China remains a challenge.

Commenting on India’s widening merchandise trade deficit with China, Sitharaman said that is where the emphasis on “Atmanirbhar Bharat” is crucial.

“That is where I think we are clear in Make in India, we have to build capacities for essential goods to make in India. Even as I say this, we haven’t restricted imports of some raw materials because we need those goods, but capacities also have to grow, so we are doing a fine balancing act,” she said.

India's trade deficit with China hit a record $116.12 billion in 2025.

On the central government weighing possible changes to Press Note 3 to spur investments, Sitharaman said discussions on this have taken place.

“Well, some discussions were happening, not sure where it has reached once it arrives at something I will be able to say,” she said.

Press Note 3 is part of India’s Foreign Direct Investment (FDI) policy, which was brought in April 2020, aimed at warding off any attempt at opportunistic takeover or acquisition of Indian companies.

Under Press Note 3, an entity of a country sharing a land border with India or where the beneficial owner of an investment in India is situated in or is a citizen of any such country, can invest only through the government route.

These amended rules under Press Note 3 came into force from April 22, 2020, increasing scrutiny over FDI from China as well.