India’s Chinese import bill up 2.3 times in 15 years

Source-This post on India’s Chinese import bill up 2.3 times in 15 years is based on the article “Up 2.3 times in 15 years, India’s Chinese import bill to rise further ” published in “The Hindu” on 28th March 2024.

Why in the News?

According to a report by the Global Trade Research Initiative (GTRI). India’s imports from China crossed $101 billion in 2023-24 from about $70 billion in 2018-19.

Findings of the report

1. India’s imports from China crossed $101 billion in 2023-24 from about $70 billion in 2018-19.

2. Over the past 15 years, China’s share of India’s industrial goods imports surged from 21% to 30%. Also, imports from China have increased 2.3 times faster than India’s total imports during the same period.

3. China is the top supplier in eight major industrial sectors, including machinery, chemicals, pharmaceuticals, and textiles.

Status of India’s import from china

1. Almost 42% of India’s textile and clothing imports and 40% of its machinery imports in the the first 10 months of 2023-24 came from China, while that number was 38.4% for electronics, telecom and electrical products.

2. China accounted for 29.2% of chemicals and pharmaceuticals imports into India. Also, 25.8% of plastic product imports and 23.3% of automobile sector inbound shipments is from China.

3. India displayed a lower reliance on China in the case of iron, steel, and base metal imports. 

What is the concern related to trade with china?

1. Cumulative trade deficit: During the period between 2018-2019 and 2023-24, India’s exports to China remained stagnant at approximately $16 billion annually, while imports experienced a significant surge. This has led to a cumulative trade deficit surpassing $387 billion over the span of six years.

2. Imports in major industrial product categories has increased:  In 2023-24, India’s total merchandise imports amounted to $677.2 billion, with a significant portion sourced from China. Specifically, China’s share of imports in major industrial product categories has increased substantially over the past fifteen years, reaching over 70% for certain products.

3. Strategic implications: The study suggests a critical need for India to reassess its import strategies to mitigate economic risks, strengthen domestic industries, and reduce reliance on single-country imports, particularly from geopolitical competitors such as China.

UPSC Syllabus: Indian economy