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Source: The post is based on the article “India’s imports from China rose sharply post Galwan clash: What trade data show” published in Indian Express on 14th December 2022
What is the News?
Amid fresh demands for snapping of trade ties with China in the wake of the Tawang clash, official data show that India’s imports from China spiked sharply post the Galwan clash, in which 20 Indian soldiers were killed.
China-India Trade
China is India’s second-biggest trading partner after the United States.
In 2021-22, India-China bilateral trade stood at $115.83 billion, which was 11.19 per cent of India’s total merchandise trade of $1,035 billion. The US was just a notch above, with 11.54 per cent ($119.48 billion) share.
Till 20 years ago, China figured at the 10th position (2001-12) or lower (12th in 2000-01). However, from 2002-03, it started an upward march and became India’s top trading partner in 2011-12. Since then, China has remained one of the top trading partners of India.
What is the difference between China and the US as a trading partner of India?
China and the US have both been India’s top trading partners in recent years. But there is a big difference between the trade with the world’s two largest economies.
While with the US, India had a trade surplus of $32.85 billion during 2021-22, with China, it had a trade deficit of $73.31 billion, the highest for any country.
In fact, India’s trade deficit with China during 2021-2022 was double the previous year’s level ($44.02 billion) and it was an all-time high.
What has been the trend in India’s trade deficit with China?
India’s trade deficit with China has increased from $1 billion to $73 billion in the past 21 years. It is expected to rise further this year.
The rising gap between imports and exports from China is evident from the fact that two decades ago, India’s imports accounted for about 60% of the total bilateral trade between the two countries, but now it is over 80%.
What does India import and export from China?
Imports: During 2021-22, 15.42% ($94.57 billion) of India’s total imports ($613.05 billion) came from China.
A look at the item-wise list of the imports shows that the most-valued Chinese item in the Indian import basket was the personal computer (laptop) followed by ‘monolithic integrated circuits-digital, lithium-ion, solar cells and urea.
As far as the US is concerned, India imported petroleum crude, coking coal, LNG, diamonds, almonds, turbo-jets, etc.
Exports: In 2021-22, India’s exports to China stood at $21.25 billion, which was 5% of India’s total shipments ($422 billion).
Among the top commodities, China bought from India included: Ores, slag and ash followed by organic chemicals, minerals and iron and steel.
As far as the United States is concerned, diamonds, gold jewellery, vannamei shrimp and turbo-jets were among the top items India exported to the US.
