China’s Share in India’s Industrial Goods Imports Rises
Over the last 15 years, China’s share in India’s imports of industrial goods has increased from 21% to 30%, according to a report by the Global Trade Research Initiative (GTRI). This growth 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 total imports from other countries.
Key Findings
- In 2023-24, India’s total merchandise imports amounted to $677.2 billion, of which $101.8 billion came from China, accounting for 15% of India’s total imports.
- Out of the $101.8 billion imports from China, $100 billion (98.5%) were in major industrial product categories.
- China’s contribution to India’s global imports of industrial products ($337 billion) is 30%, up from 21% fifteen years ago.
Sectors with Rising Dependence on China
The key sectors where India’s dependence on Chinese imports is increasing significantly include:
- Electronics, telecom, and electrical products: $26.1 billion out of $67.8 billion (38.4%)
- Machinery: $19 billion out of $47.9 billion (39.6%)
- Chemicals and pharmaceuticals: $15.8 billion out of $54.1 billion (29.2%)
- Plastics and related articles: $4.8 billion out of $18.5 billion (25.8%)
- Other sectors: Iron and steel products, textiles, automobiles, medical equipment, etc.
Composition of Imports from China
- Capital goods and machinery account for 50% of imports from China, indicating a need for focused R&D in these areas.
- Intermediate goods like organic chemicals, APIs, and plastics make up 37% of imports, highlighting the need to upgrade these industries.
- Consumer goods constitute 12% of imports, while raw materials are less than 1%.
Strategic Implications
The growing trade deficit with China and the increasing dependence on Chinese industrial goods have profound strategic implications, affecting not only economic but also national security dimensions. The Indian government and industries must evaluate and recalibrate import strategies to foster more diversified and resilient supply chains, bolster domestic industries, and reduce dependency on single-country imports, especially from a geopolitical competitor like China.
Month: Current Affairs - April, 2024
Category: International / World Current Affairs