India’s economic ties with China runs deep, made India dependent on Chinese goods

China has been the biggest home of critical imports for India, from mobile phone apparatuses to pharmaceutical components. India is working on a multilevel branched tactic to lessen this dependency, which is higher distress than the uneven trade balance. “The trade deficit is not in dollars, it is in overdependence”, said Sanjay Chadha, Additional Secretary in the Ministry of Commerce and Industry, speaking at the All-India Conference of China Studies (AICCS) controlled by the Institute of Chinese Studies (ICS) Delhi and Indian Institute of Technology Madras (IIT- M). Mr Chadha said that India was functioning on a multilevel stratagem to decrease this reliance, extending from the Production Linked Incentive (PLI) pattern to increase domestic manufacturing, a worldwide effort encompassing India’s foreign missions to discover alternate ways for China and practice of open Free Trade Agreements (FTAs) with other exchange partners. COVID-19 had facilitated this revolution. When manufacture and production in China were smashed early in 2020, even though its economy would make progress by the summer and become the only major economy to dodge contraction last year, India pooled its foreign operations lists of stuff censoriously relied on China, succeeding undertakings connected with suppliers in their countries.

Image result for Chinese product India
Image source: Express Photos

Mr Chadha, however, called a note of attention, suggestive of the procedure was at the beginning, not the end. “We have to keep in mind China is still our largest source of imports for critical items”, he said, and our pharmaceuticals and electronics sectors are hugely dependent on China.” What obtainable occasions was the drive from many countries to not ineludibly reposition from China- but to branch out, with an upcoming capacity expansion up to take hold of. The PLI scheme is expecting to seize that diversification. As it was not much a China mania as it is to attempt and create a supply chains resistant, either by way of tallying or different sources. China still rests the huge source of India’s imports, but imports last year chop down to 10.8%, the lowermost since 2016. Two-way trade in 2020 touched $87.6 billion, down by 5.6% while the trade shortfall to a fall deteriorated to a five year low of $45.8 billion.

On the trade façade with China, India exporters had thrashed for years but made little progression because of a number of non-tariff barriers. In 2018, both wings signed up number of protocols, including for rice and tobacco, but “none of this materialized in substantial trade.” India exports to China did, however, cross $20 billion for the first-time last year, with a growth in an iron ore exports by 88% according to Chinese customs data, also there was also a substantial jump in marine exports.

All such data exhibit a picture of how much India has been dependent on China for trade, which requires a proper implementation of strategies to decrease this.

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The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of The Kootneeti Team

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Mansi Shah

Mansi Shah is pursuing BA (Hons) in Political Science at Indraprastha College of Women

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