India-China: Bilateral Trade Crosses 125 billion USD in 2021

India’s trade with China had grown by 44percent in the year 2021as per the Chinese data. Talking about imports and exports the imports grew by 46% while the exports by 35 %. This despite the various measures taken in the direction of Atmanirbhar Bharat or self-reliance and post the galwan standoff.

India china trade statistics 2021

As per the imports are concerned India’s imports statistics from China have seen a rise to $97.5 billion in the year 2021 in comparison to imports of  $66.7 billion in 2020.  Hence showing a rise of around 30.3 per cent in 2019.

India’s total trade with China was $125.7 billion in 2021.

Now taking into consideration the export figures the numbers have also shown a rise of 34.9 per cent from exports worth $20.9 billion in 2020 to $28.1 billion in 2021.

India China trade deficit 2021

The growing imports from China have increased the trade deficit from $45.9 billion (2020) to $69.4 billion in 2021.

It was seen by the reports of the commerce ministry that China was the second-largest trading partner of India in the April – November term followed by the USA.

Imports from China 

India’s key imports from China include value-added goods  -:

• Smartphones
• Plastic and metallic goods
• Parts for smartphones 
• Parts of  automobiles
• Active pharmaceutical ingredients (APIs)
• chemicals.

Exports to China 

The exports to China include -:

Primary goods like iron ore, organic chemicals, cotton, steel, seafood and engineering goods.

India’s step to decrease trade dependency on china 

• It has been witnessed that India’s trade with other countries including the US, UAE and Australia were more in comparison to China . 
• India has negotiated Free Trade Agreements (FTAs) with the UAE and Australia. Further, the government is in the process of negotiating with the EU and UK.
• Moving towards self-reliance and Atmanirbhar Bharat.
• Setting up big manufacturing units or clusters to make goods like recently India is working to develop a semiconductor chips industry.
• China is a pro in dumping goods to other countries.For this  India has imposed anti-dumping duties on five Chinese products –  like aluminium goods and chemicals etc .
• A tighter FDI rule wherein the central government’s approval is required for any FDI in India firms from any neighbouring countries. This will help in preventing a takeover by Chinese companies amid reviving the economy.

Significance of the trade deficit 

The widening trade deficit is a matter of concern for India as it can be used against India to imbalance the economy of the country by playing the demand-supply game and altering the inflation levels, a negative impact on the currency is also seen due to large trade deficit and it creates a dependency on china which in future in an economic crisis in China can have a rippling effect on India. India is dependent on China to the ratio of 1:4 and that can be used to choke India at a crisis time. So it is the utmost priority to work to reduce the trade deficit.

Recent figures

India has exported more than $25 million to China but has imported around$ 100 million from Beijing.

Conclusion

India’s trade with China has gone up by 44% in the entire year. In terms of imports, there is a 46% increase while the exports have grown by 35%. India’s total trade with China was $125.7 billion in 2021. India imports smartphone components for smartphones and automobiles, telecom equipment, Plastic and metallic goods, and Active pharmaceutical ingredients (APIs).

While in terms of iron ore, organic chemicals, cotton, steel, seafood and engineering goods. India is dependent on China in the ratio of 1:4 and that can be used to choke India at a crisis time. So it is the utmost priority to work to reduce the trade deficit. Thus moving towards a self-reliant India is crucial