A report stated that over the past 15 years, China’s contribution to India’s imports of industrial goods such as telecommunications, machinery, and electronics has increased from 21 percent to 30 percent as India relies more on Chinese products. As per the study from the economic research organization GTRI, the increasing trade imbalance with China is worrying, with deep consequences for both economic and national security aspects.
Between 2019 and 2024, India’s exports to China have remained steady at approximately USD 16 billion each year, while imports from China have increased from USD 70.3 billion in 2018-19 to more than USD 101 billion in 2023-24, leading to a total trade deficit surpassing USD 387 billion during the five-year period.
According to Ajay Srivastava, the founder of GTRI, the Indian government and industries need to reexamine and possibly adjust their import strategies to develop supply chains that are more varied and robust.
He emphasized the importance of not only decreasing economic risks, but also strengthening local industries and decreasing reliance on imports from one country, particularly a competitor like China.
In the past 15 years, the portion of China’s industrial products in India’s imports has risen substantially, from 21% to 30%.
The report stated that the increase in imports from China has outpaced India’s overall import growth, with China’s exports to India growing 2.3 times faster than India’s imports from all other nations.
During 2023-24, India imported goods worth USD 677.2 billion in total, of which USD 101.8 billion was from China.
This implies that China represented 15 percent of all imports to India.
It stated that this accounts for a significant 38.4 percent of all imports in this sector, showing a strong reliance on Chinese electronics and parts.
China’s share of India’s imports in the machinery sector is USD 19 billion, making up 39.6 per cent.
According to Srivastava, this highlights China’s significant position as a machinery provider for India.
India’s imports of chemicals and pharmaceuticals amounted to USD 54.1 billion during the given period. China contributed USD 15.8 billion to this total sum.
This led to a Chinese market share of 29.2%, indicating the significance of Chinese chemical and pharmaceutical goods in India.
In the same way, the report indicated that the total imports for plastics and related items amount to USD 18.5 billion, with China supplying items valued at USD 4.8 billion.
This represents 25.8 percent of all imports in this industry.
Srivastava stated that fifty percent of the imports from China are made up of capital goods and machinery, highlighting the urgent necessity for targeted efforts in research and development within this sector.
Organic chemicals, APIs, and plastics, categorized as intermediate goods and accounting for 37% of imports, require urgent industry upgrades,
According to him. Consumer goods make up 12% of imports, and raw materials constitute less than 1%.
The report indicated that Indian companies had been handling imports, but with the arrival of Chinese firms, India’s industrial product imports are expected to increase quickly.
Indian imports will see a significant increase because Chinese companies in India will choose to source most of their needs from their main companies. The report stated that in the upcoming years, every third electric vehicle (EV) and numerous passenger and commercial vehicles in India could be manufactured by Chinese companies within India or in collaboration with Indian companies.
It was also mentioned that the arrival of Chinese automakers in India on a large scale will have an effect on local auto/EV manufacturers, companies involved in the EV value chain sector, and battery development.
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