NEW DELHI,apr 28
A recent report by the economic think tank Global Trade Research Initiative (GTRI) highlights India’s rising reliance on Chinese industrial products like telecom, machinery, and electronics. Over the past 15 years, Beijing’s share in New Delhi’s imports of these goods has increased from 21% to 30%. This growing trade deficit with China raises concerns, with significant implications for both economic stability and national security. From 2019 to 2024, India’s exports to China have stagnated at around USD 16 billion annually, while imports from China have surged from USD 70.3 billion in 2018-19 to over USD 101 billion in 2023-24, resulting in a cumulative trade deficit exceeding USD 387 billion over five years.Ajay Srivastava, founder of GTRI, emphasized the need for the Indian government and industries to reassess their import strategies. He suggested fostering diversified and resilient supply chains to mitigate economic risks. This, he stressed, would not only support domestic industries but also reduce dependency on single-country imports, particularly from geopolitical competitors like China.”Over the last 15 years, China’s share in India’s industrial product imports has increased significantly, from 21 per cent to 30 per cent.”This growth in imports from China has been much faster than India’s overall import growth, with China’s exports to India growing 2.3 times faster than India’s total imports from all other countries,” the report said.In the fiscal year 2023-24, India’s total merchandise imports reached USD 677.2 billion, with China contributing USD 101.8 billion. This indicates that China constituted 15% of India’s overall imports. Of these imports from China, USD 100 billion, equivalent to 98.5%, comprised major industrial product categories.”When compared to India’s global imports of these industrial products, which total USD 337 billion, China’s contribution is quite significant, representing 30 per cent of India’s imports in this sector. Fifteen years ago, China’s share was just 21 per cent,” it added.New Delhi’s growing dependence is particularly notable in key sectors such as electronics, telecom, electrical products, machinery, chemicals, pharmaceuticals, iron, steel, base metals, plastics, textiles, clothing, automobiles, medical supplies, leather goods, paper, glass, ships, aircraft, and other remaining categories. From April to January in the fiscal year 2023-24, the electronics, telecom, and electrical products sector witnessed the highest import value, totaling USD 67.8 billion, with China accounting for USD 26.1 billion of that amount.”This represents a substantial 38.4 per cent of the total imports in this category, indicating a heavy dependence on Chinese electronic goods and components,” it said.In the machinery sector, China’s contribution amounts to USD 19 billion, representing 39.6% of India’s imports in this category. This underscores China’s significant role as a machinery supplier to India, noted Srivastava.
India’s chemical and pharmaceutical imports totaled USD 54.1 billion during the period, with China accounting for USD 15.8 billion, or 29.2%. This highlights China’s importance as a provider of chemical and pharmaceutical products to India.Similarly, in the plastics and related articles sector, total imports amount to USD 18.5 billion, with China supplying goods worth USD 4.8 billion, comprising 25.8% of total imports in this sector.Srivastava also highlighted that half of India’s imports from China consist of capital goods and machinery, emphasizing the critical need for focused research and development in this area.He emphasized the urgency of upgrading industries related to intermediate goods like organic chemicals, APIs (Active Pharmaceutical Ingredients), and plastics, which constitute 37% of imports.
