Rediff.com  » Business » Why China has a sizeable presence in India's import basket

Why China has a sizeable presence in India's import basket

By Shreya Nandi and Dilasha Seth
July 23, 2021 12:52 IST
Get Rediff News in your Inbox:

India’s merchandise imports from China more than doubled to $6.51 billion in April.

China trade

Illustration: Uttam Ghosh/Rediff.com

A year after the government’s renewed push to become self-reliant and the clamour for banning Chinese goods in the country owing to the border dispute, inbound shipments from India’s largest trading partner continued to be on the rise.

India’s merchandise imports from China more than doubled to $6.51 billion in April over the same period a year earlier.

 

Even as the 114 per cent YoY jump can be attributed partly to the statistical effect of a low base due to disruption caused by the pandemic, imports of items such as electronic components, computer hardware, and telecom equipment soared.

Sample this. In April, 40.71 per cent of India’s imports of electronic components were from China.

The share was 33.54 per cent during the same month in 2020, 33.82 per cent in 2019, and 33.90 per cent in 2018, the data released by the Ministry of Commerce and Industry showed.

Similarly, imports of electronic components have been rising consistently over close to a decade on an annual basis.

Annually the share rose to 40.5 per cent in FY21 from 37.2 per cent in FY20 and 36.9 per cent in the previous year.

China accounted for 16.53 per cent of India’s imports in FY21, the highest in at least 12 years.

Although the trade deficit with China in 2020-21 shrunk to $44.11 billion, Beijing’s share in India’s overall trade deficit rose to a four-year high of 43 per cent.

India’s imports from China are largely dominated by electronic components, telecom instruments, organic chemicals, computer hardware and peripherals, industrial instruments for dairy, consumer electronics, plastic raw materials, among others.

Despite the popular pitch against Chinese-made goods, imports of key consumer electronic items grew unabated.

Consumer electronics from China, which makes key durable items such as vacuum cleaners, refrigerators or microwaves, captured a big market share in India in April compared to the corresponding period last year.

About 63 per cent of consumer electronics imports in India were from China in April compared to 26 per cent last year.

The share grew significantly in 2020-21 to 52.3 per cent from 44 per cent in 2019-20.

Computer hardware and peripherals shipped from Beijing made up for half of India’s shipments last year.

The share has grown to 50.8 per cent in FY21 compared to 46.4 per cent in FY20 and 44.6 per cent in FY19.

The share has expanded further in April 2021 to 55 per cent compared to 51 per cent in the corresponding period last year.

Telecom instrument imports from China accounted for 43.5 per cent of India’s inbound shipment in this area in 2020-21, compared to 39 per cent in the previous year.

In April, the share of telecom instruments from China rose to 47.3 per cent from 33.6 per cent.

More than half the consumer electronics imports in India in FY21 were from China, compared to about 40 per cent in the previous two years.

“China has been the manufacturing factory of the world for many years.

"Even as the government is talking of Aatmanirbhar Bharat initiatives, it is difficult to implement it in a short period.

"It is not easy to shift sourcing away from China to any other country in the world,” said Arvind Singhal, chairman and managing director, Technopak Advisors.

“It is important to note that despite the fact that even as GDP (in 2020-21) collapsed due to the pandemic, imports from China remained almost where they were even before the outbreak of Covid-19.

"China remains the most competitive manufacturer in the world,” Singhal said.

Get Rediff News in your Inbox:
Shreya Nandi and Dilasha Seth in New Delhi
Source: source
 

Moneywiz Live!