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India’s Rising Chinese Import Bill

GS-3 Mains : Economy

Revision Notes

Question : Analyze the findings of the Global Trade Research Initiative (GTRI) report regarding India’s rising imports from China. What are the key trends in India-China trade relations

Why in News?

• A report by the Global Trade Research Initiative (GTRI) highlights a significant rise in India’s imports from China.

Key Findings

• Import Growth: China’s share of India’s industrial goods imports has jumped from 21% to 30% over 15 years, with total imports from China exceeding $101 billion in 2023-24 (up from $70 billion in 2018-19).
• Overall Trade: China is the top supplier for eight major industrial sectors (machinery, chemicals, pharmaceuticals, etc.) in India, accounting for 15% ($101.8 billion) of India’s total merchandise imports ($677.2 billion) in 2023-24.
• Trade Deficit: India’s exports to China have stagnated around $16 billion annually between 2018-19 and 2023-24, while imports surged. This resulted in a cumulative trade deficit exceeding $387 billion over six years.

Concerns of India-China Trade Relations

• Trade Imbalance: The significant trade deficit with China raises concerns about:
  • Impact on domestic industries and employment.
• Quality and Safety: There are concerns about the quality and safety of some Chinese goods (electronics, consumer products).
• Dumping Practices: Allegations of Chinese companies dumping goods (selling below production cost) harm Indian industries.
• Market Access: Restrictions on foreign investment, complex approval processes, and intellectual property issues hinder Indian businesses in China.
• Strategic Competition: Regional and global rivalry between India and China can affect trade relations.
• Security Concerns: Security risks are associated with Chinese investments in critical Indian infrastructure projects.

Concluding Remarks

• India’s heavy reliance on China has strategic implications beyond just economic factors, impacting national security.
• Reassessing import strategies is crucial to:
  • Mitigate economic risks.
  • Bolster domestic industries.
  • Reduce dependence on single-country imports.

Source : https://epaper.thehindu.com/ccidist-ws/th/th_delhi/issues/81159/OPS/G59CNUEOA.1+GMQCO0K8D.1.html