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 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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