India and China will trade bilaterally

Despite India’s efforts to lessen reliance on Chinese imports in the face of growing policy focus on self-reliance and ongoing border tensions, bilateral trade between the two countries grew by 44% in 2021, according to Chinese government data for the entire calendar year. Imports increased by 46 percent, while exports increased by 35 percent.

What are India’s Chinese imports?

According to data from the China General Administration of Customs, India’s imports from China increased by 46.1 percent to $97.5 billion in calendar year 2021, up from $66.7 billion in 2020, which was hit by Covid-19-related limitations. The pandemic had little effect on imports, which were up 30.3 percent in 2019. The overall trade of India.

India’s trade imbalance with China is expected to reach $69.4 billion up from $45.9 billion and $56.8 billion. Only until November 2022 are India’s official data on bilateral trade with China updated.

China was India’s second largest commercial partner in the April-November period, after the United States, according to Commerce Ministry data. During this time, India’s biggest trading partners included the United Arab Emirates, Saudi Arabia, Iraq, and Hong Kong.

Smartphones, smartphone and vehicle components, telecom equipment, plastic and metallic items, active pharmaceutical ingredients (APIs), and other chemicals are among India’s most important imports from China. Experts have remarked that players in the Indian electronic goods market are still primarily focused on product assembly and lack discretion in component procurement.

However, officials from India’s Commerce Ministry have previously stated that trade growth with other significant trading partners such as the United States, the United Arab Emirates, and Australia was even higher than trade growth with China earlier this fiscal year. India is currently negotiating Free Trade Agreements (FTAs) with the United Arab Emirates, the European Union, the United Kingdom, and Australia.

What is the rate of increase in India’s exports to China?

According to Chinese official data, India’s exports to China increased by 34.9 percent to $28.1 billion in calendar year 2021, up from $20.9 billion in 2020, which were hampered by Covid-19-related limitations. India’s exports to China in 2020 were 56.5 percent greater than in 2019, despite the epidemic having little effect. India’s outbound trade with China is dominated by raw material exports, with iron ore, organic chemicals, and cotton among the most important export goods. Iron and steel, seafood, and engineering goods are all important exports to China.

Why is the government attempting to limit chinese imports?

Militaries from India and China clashed in Ladakh’s Galwan Valley in June 2020. Soon after, the Chinese Power Ministry announced a de facto embargo on the import of power equipment, citing security concerns. The government has also instructed BSNL and MTNL, two state-owned telecommunications providers, to ban Chinese telecom equipment giants Huawei and ZTE from the network upgrade process.

The government also changed FDI rules, requiring the approval of the Centre for any FDI in Indian firms from neighbouring countries, ostensibly to avoid opportunistic takeovers of domestic firms by Chinese companies during the pandemic.

India has also tightened its controls on Chinese goods being dumped in the country. To protect domestic producers, India levied five-year anti-dumping tariffs on five Chinese products, including certain aluminium goods and chemicals, in December 2022.

The most significant increase, according to the GACC, has been in the shipment of electric and electronic goods, such as smartphones and storage units; a wide range of industrial goods, such as telecom equipment, auto components, and machine tools; and specialty chemicals, such as APIs and fertilisers such as urea, ammonia sulphate, and other varieties.

India imports more petroleum products from China than any other country.

According to India’s Ministry of Commerce and Industry’s Foreign Trade Performance Analysis (FTPA), imports of petroleum (crude) and petroleum products, pearls, precious and semi-precious stones, and coal, coke, and briquettes from China increased significantly in the first eight months of the calendar year 2022.

During this time period, these commodities accounted for around $60 billion of China’s total imports. India is yet to release commodity-specific data for December.

India’s overall relationship with China appears to parallel that of the United States and China, with its own set of economic and political dynamics. Biswajit Dhar, a trade economist and professor at JNU’s School of Social Sciences’ Centre for Economic Studies and Planning.