Why is it in the news?
- India’s imports from China have increased significantly, crossing $101 billion in the fiscal year 2023-24, compared to about $70 billion in 2018-19, according to Global Trade Research Initiative (GTRI) report.
More about the news
- Over the span of 15 years, from 2008-09 to 2023-24, imports from China have risen 2.3 times faster than India’s total imports.
- China has become the leading supplier in eight major industrial sectors in India, including machinery, chemicals, pharmaceuticals, and textiles.
- The trade deficit with China is a growing concern for India, with imports surpassing exports, resulting in a cumulative trade deficit exceeding $387 billion over six years.
- Although India’s exports to China have increased in certain commodities, the overall trade imbalance persists.
- There is a need for India to reassess its import strategies to mitigate economic risks, bolster domestic industries, and reduce dependency on single-country imports, especially from geopolitical competitors like China.
- The entry of Chinese firms into the Indian market is expected to further accelerate India’s industrial product imports.
- India’s trade surplus with China existed between 2003 and 2005, but since then, Chinese goods have dominated trade flows, leading to an increasing trade deficit for India.
