India-China Trade amid tension – A look
New Delhi, June 17 (KNN) Though the tensions between India and China have escalated in the recent past, but the relationship between the two has never been silk smooth. India even withdrew from the sixteen country Regional Comprehensive Economic Partnership trade negotiations in November due to unreasonable Chinese stand on certain core concerns.
However, on the trade front, China is one of the two countries out of the top 25 destinations of India's engineering exports which showed an year-on-year growth in April 2020, while the remaining countries showed massive contraction up to 91 per cent in some cases due to the hugely disruptive impact of Covid-19.
A bulk of India's imports from China consists of capital goods like power plants, telecom equipment, metro rail coaches, iron and steel products. A lot of finished products like fertilisers, refrigerators, washing machines and air conditioners are also imported from China. In the intermediate products section, components for industries like electronics and mobile phones, autos, pharmaceuticals, chemicals and plastics, engineering goods also come into the country from China.
India’s export basket to China comprises mainly primary products like iron ore, agricultural products, with manufactured products accounting for only a small proportion.
China is one of India’s leading trade partners and constitutes 9 percent of India’s total exports and 18 percent of total merchandise imports.
Of the respective imports, 20 percent of the auto components and 70 percent of electronic components come from China. Similarly, 45 percent of consumer durables, 70 percent of APIs and 40 percent of leather goods imported are from China.
According to some exporters, during the lockdown imports were more and exports were down. Now exports have jumped and imports have stayed low.
According to a CII report China supplies 43 per cent of India’s imports of top 20 goods, including mobile handsets (USD 7.2 billion import from China), computers (USD 3 billion), integrated circuits, other inputs (USD 7.5 billion), fertilizers (USD 1.5 billion), Active Pharmaceutical Ingredient (USD 1.4 billion) and antibiotics (USD1.1 billion).
In 2018-19, India’s exports to China were mere USD16.7 billion, while imports were USD 70.3 billion, leaving a trade deficit of USD 53.6 billion.
In order to make Indian products more competitive in the global supply chain, Prime Minister Narendra Modi in his address to the nation earlier had already called for an Atma Nirbhar Bharat. He had called for a policy shift in making India self-reliant.
"India's industry leaders need to invest in building robust local supply chains that will strengthen India's position in the global chain," PM Modi said recently.
Twenty Army personnel, including a colonel were killed in the clash with the Chinese troops valley on Monday night.