India’s imports from China reached nearly 100 billion dollars for the first time in 2021. It includes electrical and electronic goods, mainly smartphones, machinery, fertilizers and speciality chemicals, including active pharmaceutical ingredients.
According to Foreign Trade Performance Analysis by India’s Ministry of Commerce and Industry, the first eight months of 2021 records the import of petroleum (crude) and petroleum products, pearls, precious and semi-precious stones.
There was also a rise in coal, coke and briquettes imports. These items made a total estimate of about 60 billion dollars imports from China during this period.
Another report by the General Administration of Customs shows that India’s total imports from China crossed a record 97.5 billion dollars last year, making up a large chunk of the bilateral trade that reached 125 billion dollars for the first time crossing the 100 billion dollars mark.
In a study by Santosh Pai, an Honorary Fellow at the Institute of Chinese Studies in New Delhi, the top 100 items by value accounted for 41 billion dollars which rose from 25 billion dollars in 2020.
Intermediate products, particularly chemicals, also recorded remarkable growth. Even acetic acid increased by more than eightfold.
Indo-China Political Impasse
Biswajit Dhar, trade economist and professor, JNU, told The Print, “India’s overall relationship with China seems to mirror the US-China relationship, in which economic and political relations have their distinct dynamics.”
Despite the economic cooperation between the two countries, the political relationship has suffered a significant shift, especially after the takeover of China by the Communist Party.
The Indian media outlets cover frequent border disputes on Chinese military incursions into Indian territory. The border dispute is still not possible to resolve from both sides. And on addition to that, India is sceptical about China’s strategic solid bilateral relations with Pakistan.
Dhar further added that China is the ‘factory of the world’. Thus, the US also heavily relies on Chinese imports even if the political relationship may not be as cooperative as the economic one.
It is the same with India as, despite the violent Galwan valley dispute, India’s dependence is only surging upon the Chinese market. The burgeoning growth of Chinese goods in India speaks about the close economic support.
On June 15 last year, a violent military dispute between the Indian and Chinese armies took place in Ladakh’s Galwan Valley. It killed 20 Indian soldiers and was one of the worst in 45 years.
But the economic relations between the politically rival countries show a very different picture of cooperation instead of the border disputes and the political rift. India is still heavily dependent upon the Chinese market despite the political backlashes.
Growth of Indian Exports in China
Engineering goods shipment to China doubled in November 2021 to USD 434.6 million compared to USD 205.3 million in the same month, the previous year. According to the FIFO, India’s exports also skyrocketed in China.
Amid the Covid19 pandemic, China imported medical products and raw materials from India’s burgeoning pharmaceutical industry to combat the recurring bouts of the virus in the country.
There is a steady growth of Indian exports in the Chinese market, but the political connection remains cold and standoffish. According to the DGCIS data, Indian exports to China jumped to 24 billion dollars in 2021, compared to 19 billion dollars in 2022 and 17.1 billion dollars in 2019.
Ajai Sahai, director and CEO of the Federation of Indian Export Organizations, added that “India’s exports to China are also growing steadily. In 2021, we got some market access in China’s agricultural market. We are now exporting more non-basmati rice, exotic vegetables, soybeans and fruits.”
Published By – Vanshu Mehra
Edited By – Subbuthai Padma
