Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

India-China trade crossed $125 bn in 2021

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : India-China trade deficit

India’s trade with China in 2021 crossed $125 billion, with imports from China nearing a record $100 billion, underlining continued demand for a range of Chinese goods, particularly machinery.

Note: India-China trade has always been an all-time contested issue. This newscard presents crucial stats which is essential to substantiate your answers in Mains as well as in Interviews.

Highlights of the bilateral trade

  • Bilateral trade reached $125.6 billion in 2021, with India’s imports from China accounting for $97.5 billion.
  • Trade fell from $92.8 billion in 2019 to $87.6 billion in 2020 on account of the pandemic.
  • Trade has boomed in 2021 thanks to a recovery in demand as well as rising imports of new categories of goods such as medical supplies.
  • Also, note that these figures exclude bilateral trade between India and Hong Kong.

Imports-Exports imbalance

  • Imports were higher by 30% from 2019 while India’s exports to China, amounting to $28.1 billion, were up by as much as 56% from two years earlier.
  • The trade deficit last year reached $69.4 billion, up by 22% from the pre-pandemic figure in 2019.
  • While a break-up of imports and exports wasn’t immediately available, India’s biggest exports to China in recent years were iron ore, cotton, and other raw material-based commodities.
  • India has imported large quantities of electrical and mechanical machinery, active pharmaceutical ingredients (APIs), auto components, and over the past two years, a range of medical supplies from oxygen concentrators to PPEs.

A global comparison

  • The 43% year-on-year growth in bilateral trade with India was among the highest that China recorded with its major trading partners.
  • Trade figures with China’s top three trading partners showed growth of 28.1% with ASEAN (to $878.2 billion), 27.5% with the EU (to $828.1 billion), and 28.7% with the US, (to $755.6 billion).

Back2Basics: India-China Bilateral Trade

  • China is India’s largest trading partner.
  • Major commodities exported from India to China were: cotton; gems, precious metals, coins; copper; ores, slag, ash; organic chemicals; salt, sulphur, stone, cement; machines, engines, pumps.
  • Major commodities imported from China into India were: electronic equipment; machines, engines, pumps; organic chemicals; fertilizers; iron and steel; plastics; iron or steel products; gems, precious metals, coins; ships, boats; medical, technical equipment.

 

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