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

India’s imports from China rose to a record in first half of 2022

Note4Students

From UPSC perspective, the following things are important :

Prelims level : NA

Mains level : India-China trade imbalance

India’s imports from China reached a record $57.51 billion in the first half of the year, according to China’s trade figures.

India-China Bilateral Trade

  • China is India’s largest trading partner.
  • 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, and technical equipment.
  • Major commodities exported from India to China were: cotton; gems, precious metals, coins; copper; ores, slag, ash; organic chemicals; salt, sulfur, stone, cement; machines, engines, and pumps.

Recent measures to curb imports from China

  • Blame it on the pandemic and the border dispute, but the result is the same: some Indian businesses are boycotting China.
  • The government is now asking Indian e-commerce companies like Flipkart and Amazon India to label country of origin for all products sold on its websites.
  • The govt banned many Chinese mobile applications, including top social media platforms such as TikTok, Helo and WeChat and games such as PUBG.

Can we completely boycott Chinese products?

  • Trade deficits are not necessarily bad: Both Indian consumers and Chinese producers are gainers through trading.
  • Will hurt the Indian poor the most: This is because the poor are more price-sensitive.
  • Will punish Indian producers and exporters: Several businesses in India import intermediate goods and raw materials, which, in turn, are used to create final goods — both for the domestic Indian market as well as the global market.
  • Pharma sector could be worst hit: For instance, of the nearly $3.6 billion worth of ingredients that Indian drug-makers import to manufacture several essential medicines, China catered to around 68 per cent.
  • Will barely hurt China: According to the United Nations Conference on Trade and Development (UNCTAD) data for 2018, 15.3% of India’s imports are from China, and 5.1% of India’s exports go to China.
  • Chinese money funds Indian unicorns: India and China have also become increasingly integrated in recent years.
  • India will lose policy credibility: It has also been suggested that India should renege on existing contracts with China.

Way forward

  • In the long term, under the banner of self-reliance, India must develop its domestic capabilities and acquire a higher share of global trade by raising its competitiveness.
  • The government’s “Atmanirbhar” focus is expected to help ministries handhold industries where self-reliance needs to be built.
  • For the long run, a more effective strategy needs to be built to provide an ecosystem that addresses the cost disability of Indian manufacturing leading to such imports.

 

We would love to see you attempting these questions. Post your answer snaps in the comment box.

 

Q. India’s quest for self-reliance is still a distant dream. Critically comment in light of the popular sentiment against the Chinese imports in India.

 

Q.“Curbing Chinese imports to India will do more harm than any good”. Analyse.

 

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