In the wake of COVID-19 and the subsequent disruption to supply chains, many countries, including India, have spoken of the need to reduce reliance on China. But trade figures show imports have only continued to surge in 2021.
The rising trade comes amid continuing tensions with China along the Line of Actual Control. However, it does not suggest a return to normalcy in relations.
Other areas, such as investment, remain in a deep freeze amid the continuing chill in bilateral relations.
What did India import from China in 2021?
India’s trade with China in 2021 reached $125.6 billion. This was the first time that trade mark crossed the $100 billion.
India’s imports from China accounted for $97.5 billion, while exports reached $28.1 billion, both records.
What is driving India’s imports?
India’s biggest imports are:
electrical and mechanical machinery
a range of chemicals that are intermediate imports used by industries
active pharmaceutical ingredients
auto components
and since 2020, a large amount of medical supplies
All those key imports continued to rise in 2021. Each of the top 100 import categories accounts for more than $100 million in imports. The total value of which was up by $16 billion in the last year, reaching $45 billion.
The top items included both finished goods such as:
integrated circuits (up 147%),
laptops and computers (up 77%)
and oxygen concentrators (up four-fold)
and intermediate products such as:
chemicals (of these, acetic acid imports were up eight-fold)
What does the recent trend of trade figures suggest?
Experts say India’s dependence on China for finished goods has shown no signs of easing. The rise in intermediate imports is less of a concern as it is a sign of industrial recovery and greater demand for inputs.
Indian exports to China have also grown by more than 50% in the last two years. These are mostly raw materials such as ores, as well as cotton and seafood, and not finished products.
The five-year trend shows the trade deficit continues to widen. The deficit has grown from $51.8 billion in 2017 to $69.4 billion in 2021.
Read More at https://www.thehindu.com/news/international/watch-why-are-indias-imports-from-china-rising/