India Reduces Reliance on Chinese Imports of MSME Goods

New Delhi, Sep 3 (KNN) India's reliance on imports of MSME goods such as leather articles, toys, and musical instruments from China is steadily declining, reflecting the country's efforts to diversify its import sources and bolster domestic production capabilities, a senior government official stated on Monday.

According to data provided by the official, the import concentration of musical instruments from China decreased significantly, from 77.58 per cent in 2013 to 51.51 per cent in 2023.

Similarly, the share of imports of essential oils, cosmetics, and toilet preparations from China fell from 16.33 per cent in 2013 to 11.86 per cent in 2023. Toys and games imported from China also saw a reduction, with their share dipping from 76.7 per cent in 2013 to 70.97 per cent in 2023.

"India's trend of reducing its reliance on Chinese imports, particularly in categories like articles of leather, ceramic products, toys, and musical instruments, contrasts with the trends observed in other major markets, where dependence either remains steady or is increasing," the official explained. "This indicates a strategic shift by India towards diversifying its import sources or bolstering domestic production capabilities."

In contrast, other countries, including Brazil, are seeing an increase in their dependency on imports of these goods from China, highlighting a divergent trend in global trade patterns.

A recent report by the think tank Global Trade Research Initiative (GTRI) on September 1 underscored the challenges faced by India’s MSMEs due to imports of products such as umbrellas, toys, certain fabrics, and musical instruments.

The report noted that China supplies 95.8 per cent of India's umbrellas and sun umbrellas (USD 31 million) and 91.9 per cent of artificial flowers and human hair articles (USD 14 million). These imports are impacting local manufacturers, many of whom produce similar goods.

In light of these findings, Finance Minister Nirmala Sitharaman has urged Regional Rural Banks to develop tailored products and services for MSME clusters to enhance their competitiveness and reduce dependence on imports.

India's ongoing efforts to decrease its reliance on Chinese imports signify a broader strategy to fortify its domestic industries and ensure sustainable economic growth.

(KNN Bureau)