‘India’s exports to China growing faster than inbound shipments’

Source: The post is based on the article “India’s exports to China growing faster than inbound shipments” published in The Hindu on 26th October 2022

What is the News?

India’s trade equation with China has been improving in recent years with outbound shipments rising faster than imports.

India’s Trade with China

China is one of India’s large trading partners. The trade between the two countries has grown 59% from about $72 billion in 2014-15 to hit $115.4 billion in 2021-22.

Exports: From $11.9 billion in 2014-15, India’s exports to China had risen 78.1% to $21.25 billion in 2021-22.

Imports: The imports from China stood at $94.16 billion in 2021-22 which is a 55.8% rise over the $60.4 billion recorded in 2014-15.

Import Products from India: Intermediate goods account for more than a third of India’s imports from China while capital goods constitute another 19.3%.

– The major items of import from China are electronic components, computer hardware and peripherals, telecom instruments, organic chemicals, industrial machinery for dairy, residual chemicals and allied products, electronic instruments, bulk drugs and intermediates.

What is the reason for India’s dependence on Chinese goods?

It can be attributed largely to 1) gap between the domestic production and demand in India and 2) China being a manufacturing hub and having price competitiveness due to economies of scale and subsidies provided by its government to Chinese industry.

What are the measures taken by India to limit Chinese imports to India?

The production-linked incentive schemes for different sectors will help reduce the dependence on such imports over time. Moreover, technical regulations framed for products such as toys, electronics, chemicals and fertilizers will help check substandard imports.