New Delhi: Imports to India from China reached nearly $100 billion for the first time in calendar year 2021, as the import of electrical and electronic goods, particularly smartphones, as well as machinery, fertilisers and specialty chemicals, including active pharmaceutical ingredients (APIs), witnessed a massive surge.
According to the latest figures published by China’s General Administration of Customs of the People’s Republic of China (GACC), exports to India reached $97.52 billion in 2021, while total two-way bilateral trade touched $125.66 billion.
According to the GACC, the biggest jump has been witnessed in the shipment of electric and electronic goods, including smartphones and storage units; a wide range of industrial goods, including telecom equipment, auto components, and machine tools; and specialty chemicals, including APIs and fertilisers such as urea, ammonia sulphate and other varieties.
India imports more petroleum products from China
In terms of key import items from China in the first eight months of the calendar year 2021, the import of petroleum (crude) and petroleum products, pearls, precious and semi-precious stones, and also that of coal, coke, and briquettes also jumped significantly, according to Foreign Trade Performance Analysis (FTPA) by India’s Ministry of Commerce and Industry.
These items together accounted for about $60 billion of the total imports from China during this period. Commodity-wise data for December is 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,” Biswajit Dhar, trade economist and professor, Centre for Economic Studies and Planning, School of Social Sciences, JNU, told ThePrint.
“Despite its worsening political relations with China, the US has not been able to decrease its reliance on the ‘factory of the world’. India, too, has been unable to decouple from the Chinese economy, despite the government of India’s efforts. India’s China-dependence syndrome could increase further when our manufacturing industries recover fully to the pre-pandemic levels,” Dhar said.
A report in the Chinese state-run Global Times also said: “An increase in China-India trade in 2021, which reached a record high, surpassing $125 billion, amid bilateral tensions, is just another piece of proof that New Delhi is unable to reduce its dependence on the Chinese market.”
Veteran economist Ajit Ranade said weaning away India’s dependence on the import of APIs from China would also take a long time.
Ajai Sahai, director and CEO, Federation of Indian Export Organisations (FIEO), added that “one of the main reasons why imports from China are touching record levels is because of the huge demand for electronic goods and machinery by the domestic industry as well as APIs”.
Meanwhile, according to the provisional data released by the Directorate General of Commercial Intelligence and Statistics under the Department of Commerce (Ministry of Commerce and Industry), India’s imports from China reached $87.5 billion, while total bilateral trade stood at $114.30 billion in 2021.
According to Dhar, the mismatch in the Indian and Chinese data could be due to certain issues related to leakages in reporting and non-reporting of data, due to under-invoicing done by exporters.
Indian exports to China growing steadily
India’s exports to China in 2021 also reached record levels, according to the FIEO.
According to DGCIS data, Indian exports to China jumped to $24 billion in 2021, compared to $19 billion in 2020 and $17.1 billion in 2019.
“India’s exports to China are also growing steadily. In 2021, we got some market access in China’s agricultural market. We are now exporting more non-basmati rice, exotic vegetables, soybeans and fruits,” added Sahai.
According to Ranade, this is the reason why the trade deficit has been kept under check. The ballooning of India-China trade deficit has always been a contentious issue between both countries.
“The trade deficit was narrowing for three years till 2019, but has been rising again. Having said that, let’s not forget that in the coming years, despite the pandemic, US and China will grow by 5 per cent. 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 that market, it will be a great driver of our growth,” he added.
India’s trade deficit with China in 2021, according to the provisional DGCIS figures, stood at $61 billion compared to $39 billion in 2020.
(Edited by Manoj Ramachandran)
Source: The Print