New Delhi, Apr 29 (KNN) A new study by the Global Trade Research Initiative (GTRI) has sounded the alarm over India’s increasing reliance on imports from China, especially for industrial goods.

The report found that over the past 15 years, India’s imports from China have ballooned from USD 70 billion in 2018-19 to over USD 101 billion in 2023-24, marking a 44.28 per cent rise.

During the same period, China’s share of India’s industrial goods imports surged from 21 per cent to 30 per cent.

The neighbouring nation is now the top supplier in eight major industrial sectors, including machinery, chemicals, pharmaceuticals, and textiles. This contradicts the perception that Chinese imports are concentrated only in the electronics sector.

“Growing trade deficit with China is a cause of concern,” the GTRI report stated, noting that India's exports to China have stagnated at around USD 16 billion annually while imports have skyrocketed, resulting in a cumulative trade deficit exceeding USD 387 billion over the last six years.

The strategic implications of this dependency are “profound” and affect not only economic but national security dimensions, according to the study. It calls for a reassessment of India's import strategies to mitigate risks, bolster domestic industries, and reduce over-reliance on a “geopolitical competitor like China.”

Of particular concern is the finding that nearly half of imports from China consist of capital goods and machinery, highlighting critical gaps in India's research and development capabilities.

Additionally, 37 per cent of imports are intermediate goods like organic chemicals, pharmaceuticals ingredients, and plastics, underscoring the need to upgrade these key industries.

As Chinese firms increasingly enter the Indian market, the GTRI study warns that the country's industrial product imports from China are poised to “rise at an accelerated pace,” as these companies will likely favour sourcing from their parent firms in China.

India once enjoyed a trade surplus with China between 2003 and 2005, exporting USD 10 billion worth of goods in 2005. However, after that year, Chinese goods came to dominate bilateral trade flows, steadily magnifying India's trade deficit with its neighbour.

(KNN Bureau)