According to a report by the Global Trade Research Initiative (GTRI), Goods imports from China have risen 2.3 times faster than India’s total imports over 15 years.
Key Findings
India’s imports from China crossed $101 billion in 2023-24 from about $70 billion in 2018-19, and the country’s share of India’s industrial goods imports has risen from 21% to 30% over 15 years.
India’s total merchandise imports stood at $677.2 billion in 2023-24, of which 15% or $101.8 billion worth goods were sourced from China.
China is the top supplier in eight major industrial sectors, including machinery, chemicals, pharmaceuticals, textiles etc.
Trade deficit concern: Between 2018-19 and 2023-24, India’s exports to China have stagnated around $16 billion annually while imports have surged, resulting in a cumulative trade deficit exceeding $387 billion over six years.
Concerns of India- China Trade Relations
Trade Imbalance: India imports far more goods from China than it exports, leading to a large trade deficit.
This trade imbalance has been a persistent issue and has raised concerns about the impact on India’s domestic industries and employment.
Quality and Safety of Chinese Goods: There have been concerns in India about the quality and safety of some Chinese goods, particularly in sectors such as electronics and consumer products.
Incidents of substandard or counterfeit products entering the Indian market have raised regulatory and consumer protection concerns.
Dumping Practices: India has accused China of engaging in dumping practices, whereby Chinese companies allegedly flood the Indian market with cheap goods at prices below production costs
This harms domestic industries in India by undercutting their competitiveness and market share.
Market Access and Non-Tariff Barriers: Issues such as restrictions on foreign investment, complex approval processes, and intellectual property rights protection have hindered Indian businesses’ efforts to expand into China.
Strategic Competition: India and China are also engaged in strategic competition, both regionally and globally.
Their growing influence in South Asia and the Indian Ocean region has led to geopolitical rivalries, which can affect trade relations.
Security concerns related to Chinese investments in critical infrastructure projects in India have also raised alarms.
India has been cautious about allowing Chinese companies to participate in sensitive sectors such as telecommunications and infrastructure, citing national security concerns.
Concluding Remarks
The strategic implications of the dependency on China are profound and affect not only economic but national security dimensions.
There is a need for a reassessment of India’s import strategies. This is imperative not only to mitigate economic risks but also to bolster domestic industries and reduce dependency on single-country imports.
