India’s tariff gap has widened over China over two years on the trot

What is the news?

India recently raised issues in WTO over China’s claims to easier norms as a developing country. China, on the other hand said there is no uniform definition of developing countries and it is still lagging behind  more developed nations of the world.

What are the difference in tariffs between China, India and US?

Average effectively applied tariff rate: According to World Bank, India’s average effectively applied tariff rate across all products was 10.2%, compared to 5.39% for China.

Per capita gross domestic product: China has gone up from $1,053.1 in 2001 to $10,434.8 in 2020. India’s has gone up from $451.6 to $1927.7 in the same period. On marking the China’s 20th year of its becoming a WTO member,WTO director said that global trade integration had helped drive China’s growth and development.

Share in export of goods and services: According to Business Standard analysis, China now has the world’s largest share in export of goods and services. It overtook the United States of America in 2017. It accounted for a 10.6% share in 2019 compared to 10.2% for the US. China’s 2020 share rose to 12.1.%, while US share was down to 9.5%.

Labour force participation rate: China had a labour force participation rate of 76.66% in 2001 while India has 57.64%. China’s number for 2020 was 66.82% compared to India’s 46.29 %. According to paper entitled” ‘The impact of trade openness on labour force participation rate”, changes in labour force population accounts for about 27% of changes in the unemployment rate following a trade liberalization.

Similar trend has been visible in the female data. China was 70.33% compared to India’s 30.67 % in 2001. China’s number for 2019 was 60.57 %, while India was at 20.79%.

Source: This post is based on the article “India’s tariff gap has widened over China over two years on the trot” published in the Business Standard on 11th January 2022.