NEW DELHI: A latest report by the financial suppose tank Global Trade Research Initiative (GTRI) highlights India’s rising reliance on Chinese industrial merchandise like telecom, equipment, and electronics. Over the previous 15 years, (*15*) share in New Delhi’s imports of those goods has elevated from 21% to 30%. This rising commerce deficit with China raises issues, with vital implications for each financial stability and nationwide safety.
From 2019 to 2024, India’s exports to China have stagnated at round USD 16 billion yearly, whereas imports from China have surged from USD 70.3 billion in 2018-19 to over USD 101 billion in 2023-24, ensuing in a cumulative commerce deficit exceeding USD 387 billion over 5 years.
Ajay Srivastava, founding father of GTRI, emphasised the necessity for the Indian authorities and industries to reassess their import methods. He recommended fostering diversified and resilient provide chains to mitigate financial dangers. This, he confused, wouldn’t solely assist home industries but in addition cut back dependency on single-country imports, significantly from geopolitical rivals like China.
“Over the last 15 years, China’s share in India’s industrial product imports has increased significantly, from 21 per cent to 30 per cent.
“This progress in imports from China has been a lot sooner than India’s total import progress, with China’s exports to India rising 2.3 instances sooner than India’s complete imports from all different international locations,” the report said.
In the fiscal year 2023-24, India’s total merchandise imports reached USD 677.2 billion, with China contributing USD 101.8 billion. This indicates that China constituted 15% of India’s overall imports. Of these imports from China, USD 100 billion, equivalent to 98.5%, comprised major industrial product categories.
“When in contrast to India’s world imports of those industrial merchandise, which complete USD 337 billion, China’s contribution is kind of vital, representing 30 per cent of India’s imports in this sector. Fifteen years in the past, China’s share was simply 21 per cent,” it added.
New Delhi’s growing dependence is particularly notable in key sectors such as electronics, telecom, electrical products, machinery, chemicals, pharmaceuticals, iron, steel, base metals, plastics, textiles, clothing, automobiles, medical supplies, leather goods, paper, glass, ships, aircraft, and other remaining categories. From April to January in the fiscal year 2023-24, the electronics, telecom, and electrical products sector witnessed the highest import value, totaling USD 67.8 billion, with China accounting for USD 26.1 billion of that amount.
“This represents a considerable 38.4 per cent of the full imports in this class, indicating a heavy dependence on Chinese digital goods and elements,” it said.
In the machinery sector, China’s contribution amounts to USD 19 billion, representing 39.6% of India’s imports in this category. This underscores China’s significant role as a machinery supplier to India, noted Srivastava.
India’s chemical and pharmaceutical imports totaled USD 54.1 billion during the period, with China accounting for USD 15.8 billion, or 29.2%. This highlights China’s importance as a provider of chemical and pharmaceutical products to India.
Similarly, in the plastics and related articles sector, total imports amount to USD 18.5 billion, with China supplying goods worth USD 4.8 billion, comprising 25.8% of total imports in this sector.
Srivastava also highlighted that half of India’s imports from China consist of capital goods and machinery, emphasizing the critical need for focused research and development in this area.
He emphasized the urgency of upgrading industries related to intermediate goods like organic chemicals, APIs (Active Pharmaceutical Ingredients), and plastics, which constitute 37% of imports. Meanwhile, consumer goods account for 12% of imports, with raw materials representing less than 1%.
The report highlighted that numerous products imported from China, including textiles, apparel, glassware, furniture, paper, shoes, and toys, belong to categories dominated by micro, small, and medium enterprises (MSMEs). It suggested that many of these items could potentially be manufactured domestically.
“Overall, India imports a broad array of merchandise from China, from excessive to low know-how objects, highlighting vital gaps in India’s industrial capabilities throughout numerous sectors,” it added.
Chinese companies have significant involvement in India’s energy, telecommunications, and transportation sectors, playing vital roles in areas such as smartphones, electronics, electric and passenger vehicles, solar energy, and engineering projects. According to the report, while imports were previously conducted by Indian firms, the entry of Chinese companies into the Indian market is expected to lead to a rapid increase in industrial product imports.
“As the Chinese companies working in India will choose sourcing most necessities from their dad or mum companies, Indian imports will rise sharply. For instance, in the following few years, each third electrical car (EV) and plenty of passenger and industrial autos on Indian roads might be these made by Chinese companies in India alone or via joint ventures with Indian companies,” the report mentioned.
The large-scale entry of Chinese automakers into India will influence the home auto/EV producers, companies working in the EV worth chain area and battery improvement, it added.
From 2019 to 2024, India’s exports to China have stagnated at round USD 16 billion yearly, whereas imports from China have surged from USD 70.3 billion in 2018-19 to over USD 101 billion in 2023-24, ensuing in a cumulative commerce deficit exceeding USD 387 billion over 5 years.
Ajay Srivastava, founding father of GTRI, emphasised the necessity for the Indian authorities and industries to reassess their import methods. He recommended fostering diversified and resilient provide chains to mitigate financial dangers. This, he confused, wouldn’t solely assist home industries but in addition cut back dependency on single-country imports, significantly from geopolitical rivals like China.
“Over the last 15 years, China’s share in India’s industrial product imports has increased significantly, from 21 per cent to 30 per cent.
“This progress in imports from China has been a lot sooner than India’s total import progress, with China’s exports to India rising 2.3 instances sooner than India’s complete imports from all different international locations,” the report said.
In the fiscal year 2023-24, India’s total merchandise imports reached USD 677.2 billion, with China contributing USD 101.8 billion. This indicates that China constituted 15% of India’s overall imports. Of these imports from China, USD 100 billion, equivalent to 98.5%, comprised major industrial product categories.
“When in contrast to India’s world imports of those industrial merchandise, which complete USD 337 billion, China’s contribution is kind of vital, representing 30 per cent of India’s imports in this sector. Fifteen years in the past, China’s share was simply 21 per cent,” it added.
New Delhi’s growing dependence is particularly notable in key sectors such as electronics, telecom, electrical products, machinery, chemicals, pharmaceuticals, iron, steel, base metals, plastics, textiles, clothing, automobiles, medical supplies, leather goods, paper, glass, ships, aircraft, and other remaining categories. From April to January in the fiscal year 2023-24, the electronics, telecom, and electrical products sector witnessed the highest import value, totaling USD 67.8 billion, with China accounting for USD 26.1 billion of that amount.
“This represents a considerable 38.4 per cent of the full imports in this class, indicating a heavy dependence on Chinese digital goods and elements,” it said.
In the machinery sector, China’s contribution amounts to USD 19 billion, representing 39.6% of India’s imports in this category. This underscores China’s significant role as a machinery supplier to India, noted Srivastava.
India’s chemical and pharmaceutical imports totaled USD 54.1 billion during the period, with China accounting for USD 15.8 billion, or 29.2%. This highlights China’s importance as a provider of chemical and pharmaceutical products to India.
Similarly, in the plastics and related articles sector, total imports amount to USD 18.5 billion, with China supplying goods worth USD 4.8 billion, comprising 25.8% of total imports in this sector.
Srivastava also highlighted that half of India’s imports from China consist of capital goods and machinery, emphasizing the critical need for focused research and development in this area.
He emphasized the urgency of upgrading industries related to intermediate goods like organic chemicals, APIs (Active Pharmaceutical Ingredients), and plastics, which constitute 37% of imports. Meanwhile, consumer goods account for 12% of imports, with raw materials representing less than 1%.
The report highlighted that numerous products imported from China, including textiles, apparel, glassware, furniture, paper, shoes, and toys, belong to categories dominated by micro, small, and medium enterprises (MSMEs). It suggested that many of these items could potentially be manufactured domestically.
“Overall, India imports a broad array of merchandise from China, from excessive to low know-how objects, highlighting vital gaps in India’s industrial capabilities throughout numerous sectors,” it added.
Chinese companies have significant involvement in India’s energy, telecommunications, and transportation sectors, playing vital roles in areas such as smartphones, electronics, electric and passenger vehicles, solar energy, and engineering projects. According to the report, while imports were previously conducted by Indian firms, the entry of Chinese companies into the Indian market is expected to lead to a rapid increase in industrial product imports.
“As the Chinese companies working in India will choose sourcing most necessities from their dad or mum companies, Indian imports will rise sharply. For instance, in the following few years, each third electrical car (EV) and plenty of passenger and industrial autos on Indian roads might be these made by Chinese companies in India alone or via joint ventures with Indian companies,” the report mentioned.
The large-scale entry of Chinese automakers into India will influence the home auto/EV producers, companies working in the EV worth chain area and battery improvement, it added.
