India’s dependence on China for industrial goods imports jump to 30%

New Delhi: With increasing India's dependence on Chinese industrial goods like telecom, machinery and electronics, Beijing's share in New Delhi's imports of such goods rose to 30 per cent from 21 per cent in the last 15 years, a report said.

According to the report by the economic think tank Global Trade Research Initiative (GTRI), the growing trade deficit with China is a cause of concern, and the strategic implications of this dependency are profound, affecting not only economic but also national security dimensions. From 2019 to 2024, India's exports to China have stagnated at around $16 billion annually, while imports from China have surged from $70.3 billion in 2018-19 to over $101 billion in 2023-24, resulting in a cumulative trade deficit exceeding $387 billion over five years. The Indian government and industries must evaluate and potentially recalibrate their import strategies, fostering more diversified and resilient supply chains, GTRI founder Ajay Srivastava said. This is imperative not only to mitigate economic risks but also to bolster domestic industries and reduce dependency on single-country imports, especially from a geopolitical competitor like China, he added.

"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," the report said.

In 2023-24, India's total merchandise imports amounted to $677.2 billion, with $101.8 billion of that coming from China. This means China accounted for 15 per cent of India's total imports. 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 just 21 per cent," it added. The key sectors, where New Delhi's dependence is rising significantly, include electronics, telecom and electrical; machinery; chemicals and pharmaceuticals; products of iron, steel and base metal; plastics; textiles and clothing; automobiles; medical, leather, paper, glass, ships, aircraft and remaining categories. During April-January 2023-24, the electronics, telecom and electrical products sectors had the highest import value at $67.8 billion, with China contributing $26.1 billion.