Contrary to general perception that India’s imports from China is high in only electronics sector, China is the top supplier in all 8 industrial sectors including electronics, says the Global Trade Research Institute in a report. The institute is headed by former Trade Service officer Ajay Srivastava. China’s share in India’s industrial product imports is 30 per cent. Imports from China are set to rise sharply with large scale presence of Chinese firms in India.
The share of China in India’s industrial product imports is 30 per cent. For some products reliance is more than 70 per cent. GTRI analysed product-level import data across eight industrial sectors for the past 15 years, revealing a significant reliance on Chinese imports across categories like electronics, machinery, chemicals, pharmaceuticals, and textiles. China is the largest supplier to India in each of these categories, says the Global Trade Research Institute.
Over the last 15 years, China’s share in India’s imports of industrial goods increased from 21 per cent to 30 per cent. Imports from China grew 2.3 times faster than India’s total imports. This has implications for national security, suggesting that India must reassess its import strategies and develop more diversified and resilient supply chains.
From 2019 to 2024, India’s exports to China have stagnated around $16 billion annually while imports from China have surged from $70.3 billion in FY2019 to over $101 billion in FY2024, resulting in a cumulative trade deficit exceeding $387 billion over five years. Not long ago, India had a trade surplus with China. India exported goods of value $10 billion to China in 2005. Chinese trade records reveal that India had a trade surplus with China during the 2003-2005 period. After 2005, China raced ahead, and India’s trade deficit steadily widened with import of $101 billion in FY2024 from China.
GTRI has analysed the product level import data across eight industrial sectors over a longer time span of the past 15 years. The sectors subjected to examination are:
Electronics, Telecom, and Electrical Products; Machinery Chemicals and Pharmaceuticals; Products of Iron, Steel and Base Metals; Plastics, articles; Textile and Clothing; Automobiles, other vehicles; Medical, Leather, Paper, Glass, Ships, Aircraft, and remaining categories
For this analysis, GTRI has defined Industrial Goods to include products except Agriculture, Ores, Minerals, Petroleum, Gems, and Jewellery products. Such industrial products represent 98.5 per cent of India’s imports from China. Key findings:
China’s rising share in India’s imports
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 growth in imports from China, has been much faster than India’s overall import growth, with China’s exports to India growing 2.3 times faster than India’s total imports from all other countries. India’s import of industrial goods from China soared by 215.3 per cent, rising from $25.3 billion during 2007-10 to $79.7 billion in 2020-22. In contrast, India’s imports from the rest of the world (ROW) grew by only 94.5 per cent.
India imports 30 per cent of Industrial Goods from China
In FY2024, India’s total merchandise imports amounted to $677.2 billion, with $101.8 billion of that coming from China. This means that China accounted for 15 per cent of India’s total imports. However, out of these imports from China, $100 billion or 98.5 per cent were in major industrial product categories. When compared to India’s global imports of these industrial products, which total $337 billion, China’s contribution is quite significant, representing 30 per cent of India’s imports in this sector. Fifteen years ago, China’s share was 21 per cent.
China is the largest supplier in all industrial product categories
The data for India’s industrial sector imports from April 2023 to January 2024 illustrates a significant reliance on imports from China across various sectors. The total import value for this period stands at $281.5 billion, with imports from China accounting for $84.5 billion, or approximately 30 per cent of the total imports.
Here’s a breakdown of the import data by sector:
In Electronics, Telecom and Electrical Products, of the total import value of $67.8 billion, China’s share was $26.1 billion.
Machinery imports were valued at nearly $50 billion with China accounting for $19.0 billion.
Chemicals and Pharmaceuticals sector imported $54.1 billion, with $15.8 billion coming from China.
Imports of products of Iron, Steel and Base Metals amounted to $39.2 billion with China contributing $6.9 billion.
Imports of Plastics and Articles stand at $18.5 billion, with China providing $4.8 billion.
Textile and Clothing imports were valued at $7.6 billion with $3.2 billion coming from China.
The automobile sector shows imports of $6.4 billion, with $1.5 billion sourced from China.
In the case of Medical, Leather, Paper, Glass, Ships, Aircraft and Remaining Categories, combined imports in these categories are $40.0 billion, with China’s share being $7.3 billion.
SNG Analysis:
The strategic implications of such dependence are obvious. It could influence decision-making on national security issues, forcing Indian planners to constantly look over their shoulders at Beijing’s reactions. It’s no secret, that if India does open a dialogue with China post the elections, a key demand from there would be to “normalize” the trade and investment relationship and lift restrictions on Chinese companies seeking to enter India.
While investment is welcome, it also means more imports from China, widening the trade deficit further. India can take comfort from the fact that it is not alone in this dilemma. Europe and the US are locked into the same web of dependence on China from which it’s not easy to come out of. Little wonder the focus of the West now is on “de-risking”, a recognition of the fact that China is too deeply entrenched in their ecosystem. We’ll have more on this going forward especially on India’s options.
