China's imports of industrial products into India have increased to 30% from 21% during the previous 15 years: GTRI

China's imports of industrial products into India have increased to 30% from 21% during the previous 15 years: GTRI

According to GTRI founder Ajay Srivastava, the Indian government and industry need to assess and maybe adjust their import policies in order to promote more robust and diverse supply chains.

India imported USD 677.2 billion worth of goods in total in 2023–24, with USD 101.8 billion coming from China.

According to a survey, Beijing's share of New Delhi's imports of Chinese industrial products, such as telecom, machinery, and electronics, increased from 21% to 30% over the last 15 years due to India's growing reliance on these commodities. The Global Trade Research Initiative (GTRI), an economic think tank, released a research that highlights the widening trade imbalance with China as a reason for worry. The strategic ramifications of this reliance are significant, impacting not just the economy but also national security.

India's imports from China increased from USD 70.3 billion in 2018–19 to over USD 101 billion in 2023–24, while the country's exports to China remained stagnant at around USD 16 billion yearly from 2019 to 2024. As a consequence, the trade imbalance grew to almost USD 387 billion over the course of five years. According to GTRI founder Ajay Srivastava, the Indian government and industry need to assess and maybe adjust their import policies in order to promote more robust and diverse supply chains.

He said, "This is crucial not only to reduce economic risks but also to support domestic industries and lessen reliance on imports from a single country, especially from a geopolitical competitor like China." China now accounts for thirty percent of India's imports of industrial products, up from twenty-one percent fifteen years ago.

"This growth in imports from China has been much faster than India's average import growth, with China's exports to India growing 2.3 times more rapid than India's total imports from all other countries," stated the research. India imported USD 677.2 billion worth of goods in total in 2023–24, with USD 101.8 billion coming from China.

This indicates that 15% of India's total imports came from China. Ninety-five percent, or USD 100 billion, of these imports from China fell into the key industrial product groups.

"China's contribution is rather large, constituting 30% of India's imports in this sector, when compared to India's worldwide imports of these industrial items, which total USD 337 billion. China's stake was just 21% fifteen years ago," it said. Electronics, telecommunications, and electricity; machinery; chemicals and pharmaceuticals; products made of iron, steel, and base metal; plastics; textiles and apparel; automobiles; medical; leather, paper, glass; ships, aircraft, and other categories are the main industries on which New Delhi is becoming increasingly dependent.

The electronics, telecom, and electrical goods industries had the biggest import value between April 2023 and January 2024, totaling USD 67.8 billion, with China accounting for USD 26.1 billion of that value. "This represents a substantial 38.4 per cent of the total imports in this group of products, indicating a heavy dependence on Chinese electronic merchandise as well as components," stated the report.

China is the country that imports USD 19 billion worth of machinery, or 39.6% of India's total. This highlights China's crucial role in supplying India with equipment, according to Srivastava.

Indian imports of chemicals and pharmaceuticals were USD 54.1 billion throughout that time. China accounted for USD 15.8 billion of this total. This led to a 29.2% Chinese share, underscoring the significance of Chinese pharmaceutical and chemical goods in India.

According to the same data, China accounts for USD 4.8 billion of the overall imports of plastics and associated goods, which total USD 18.5 billion. This represents 25.8% of all imports into this industry.

According to Srivastava, capital goods and equipment make about half of China's imports, which highlights the urgent need for targeted research and development in this field. According to him, there is an urgent need to upgrade these industries because intermediate goods like plastics, organic chemicals, and APIs (active pharmaceutical ingredients) account for 37% of imports. Consumer goods make up 12% of imports, while raw materials make up less than 1%.

The survey also noted that a large number of goods that are imported from China—including toys, clothes, glassware, furniture, textiles, and paper goods—come from industries where micro, small, and medium-sized businesses (MSMEs) predominate, even though the majority of these goods could be made locally. "Overall, India imports a broad array of products from China, from high to low technology objects, highlighting major discrepancies in India's industrial capabilities across various sectors," it said.

According to the report, Chinese businesses are active in India's energy, telecommunications, and transportation sectors. They also contribute significantly to the development of smartphones, electronics, solar energy, electric and passenger cars, engineering projects, and many other industries. According to the research, imports of industrial products into India have historically been made by Indian companies, but with the introduction of Chinese companies into the Indian market, imports are expected to increase quickly.

"Indian imports will increase significantly as Chinese companies doing business there will choose to get the majority of their needs from their parent companies. For instance, in the next years, Chinese companies may manufacture numerous passenger and commercial cars as well as one-third of all EVs on Indian roads either directly or via joint ventures with Indian companies, according to the paper. It further said that the large-scale entrance of Chinese automakers into India would have an effect on local car and electric vehicle manufacturers, companies operating in the EV value chain, and battery research.