What conflict? Indian imports from China soar to nearly $100 billion, driven by smartphones and machinery

New Delhi: India’s imports from China hit close to $100 billion for the first time in calendar year 2021, as the import of electrical and electronic goods, especially smartphones, as well as machinery, fertilizer and specialty chemicals, including Active Pharmaceutical Ingredients (APIs), has seen a massive surge.

According to the latest figures released by the General Administration of Customs of the People’s Republic of China (GACC) of China, exports to India reached $97.52 billion in 2021, while total bilateral trade reached $125. .66 billion.

According to the GACC, the biggest jump was seen in the shipment of electrical and electronic goods, including smartphones and storage units; a wide range of industrial goods, including telecommunications equipment, automotive components and machine tools; and specialty chemicals including APIs and fertilizers such as urea, ammonium sulphate and other varieties.

Read also : Why India’s exports bucked the trend, showed higher growth than imports in the 3 quarters of 2021-22

India imports more petroleum products from China

In terms of key items imported from China in the first eight months of calendar year 2021, the import of (crude) petroleum and petroleum products, pearls, precious and semi-precious stones, as well as that of coal, coke and briquettes also jumped significantly, according to India’s Ministry of Commerce and Industry’s Foreign Trade Performance Analysis (FTPA).

Together, these items accounted for approximately $60 billion of total imports from China during this period. Commodity data for December has yet to be released by India.

“India’s overall relationship with China seems to mirror the US-China relationship, in which economic and political relations have their own distinct dynamics,” said Biswajit Dhar, a trade economist and professor at the Center for Economic Studies and planning, School of Social Sciences, JNU, says ThePrint.

“Despite deteriorating political relations with China, the United States has been unable to reduce its dependence on the ‘factory of the world’. India, too, has not been able to decouple from the Chinese economy, despite the efforts of the Indian government. India’s China dependency syndrome could get even worse when our manufacturing industries fully recover to pre-pandemic levels,” Dhar said.

A report released by the Chinese state world times also said, “An increase in China-India trade in 2021, which reached an all-time high, exceeding $125 billion, amid bilateral tensions, is just another proof that New Delhi is unable to reduce its dependence on the Chinese market”.

Veteran economist Ajit Ranade said weaning India’s reliance on importing APIs from China would also take a long time.

Ajai Sahai, Director and CEO of the Federation of Indian Export Organizations (FIEO), added that “one of the main reasons why imports from China are at record levels is the huge demand for goods and electronic machinery by domestic industry as well as Apis”.

Meanwhile, according to provisional data released by the Trade Intelligence and Statistics Branch of the Department of Commerce (Ministry of Trade and Industry), India’s imports from China reached 87.5 billion billion, while the total two-way trade stood at $114.30 billion in 2021.

According to Dhar, the mismatch of Indian and Chinese data could be due to some issues related to reporting leaks and non-reporting of data, due to under-invoicing by exporters.

Indian exports to China are steadily increasing

India’s exports to China in 2021 also hit record highs, according to the FIEO.

According to data from DGCIS, Indian exports to China jumped to $24 billion in 2021 from $19 billion in 2020 and $17.1 billion in 2019.

“India’s exports to China are also increasing steadily. In 2021, we have gained some access to the Chinese agricultural market. We are now exporting more non-basmati rice, exotic vegetables, soybeans and fruits,” Sahai added.

According to Ranade, this is the reason why the trade deficit has been brought under control. The swelling trade deficit between India and China has always been a contentious issue between the two countries.

“The trade deficit narrowed for three years to 2019, but rose again. That said, let’s not forget that in the coming years, despite the pandemic, the United States and China will experience growth 5%. And China alone is a $6 trillion consumer market,” Ranade said.

“More than fifty countries have significant exports to China. If our exporters can tap into this market, it will be a great engine for our growth,” he added.

India’s trade deficit with China in 2021, according to provisional figures from DGCIS, stood at $61 billion compared to $39 billion in 2020.

(Edited by Manoj Ramachandran)

Read also : Modi government plans to ease restrictions on some Chinese investments

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