China-India trade stays on growth path

Thriving commerce spurs calls for two countries to deepen business links

The value of bilateral trade continues to rise as India's demand for Chinese goods remains robust and experts urge the authorities not to move away from China on business.

India's Federal Junior Minister of Commerce and Industry Anupriya Patel, writing to the Indian Parliament recently, said the value of exports to China had risen about 24 percent in the first 11 months of last year over the corresponding period the year before. The value of imports also rose.

The value of India's exports to China rose to a record high of $28.1 billion last year, 34.9 percent more than in 2020, China's General Administration of Customs said. India's exports to China last year were 56.5 percent higher than in 2019, and the value of China's exports to India last year rose by more than expected.

India's Federal Commerce and Industry Minister Piyush Goyal said the commodities whose exports were rising included engineering goods, petroleum products, organic and inorganic chemicals, electronic goods, marine products, minerals and ores.

The major import items from China include telecommunications equipment, computer hardware and peripherals, drug intermediates, consumer electronics and electrical machinery, Indian authorities said.

The Indian government has made sustained efforts to achieve more balanced trade with China, including bilateral engagements to deal with trade issues, Goyal said.

Indian importers continue to prefer imports from China, citing cost-effectiveness, easy availability and lower transport costs. Imports are cost-effective because of large-scale production in China, and as production is highly mechanized, along with lower transportation costs, said Subhro Sengupta, a Kolkata-based importer from China.

Indian experts said the trade deficit, with the value of India's imports from China now nearly four times its exports, continues to be a cause for concern.

According to India's federal commerce ministry, China was India's second-largest trading partner in the April-November period, after the US. The UAE, Saudi Arabia and Iraq were the other top trading partners for India during the period.

India's domestic manufacturing has shrunk since 2005, so the country will take a while to reverse the trend, said Murali Kallummal, associate professor at the Centre for WTO Studies, Indian Institute of Foreign Trade, New Delhi.

Research encouraged

India has to encourage domestic companies to work on research and development and then build up domestic production to reduce the country's dependence on imports, Kallummal said.

It is hard for India to find substitutes for the products it imports from China, other experts said.

Indian industry's huge demand for electronic goods and machinery are one of the main reasons behind the surge in imports from China, said Ajai Sahai, a business figure.

"India will suffer more if the country gradually distances itself from China and pursues free-trade agreements with the US, Canada, the United Kingdom and European Union member countries," said Amit K. Biswas, a professor at the department of economics and politics at Visva-Bharati University in West Bengal.

The writer is a freelance journalist for China Daily.