India-China Trade Relations

India-China Trade:
  • The two-way trade between India and China in 2021 stood at 125.66 billion USD, up 43.3% from 2020.
  • India was China’s 15th largest trade partner in 2021.
  • In 2021, China’s exports to India were 97.52 billion USD up by 46.2% while China imported 28.14 billion USD worth of goods from India up by 34.2%.
  • India’s biggest exports to China were iron ore, cotton, and other raw material-based commodities.
  • India imports from China include large quantities of electrical and mechanical machinery, active pharmaceutical ingredients (APIs), auto components, and over the past two years, a range of medical supplies from oxygen concentrators to PPEs.
  • Trade deficit between the two countries remained in favour of China at $69 billion.
Why the trade deficit has widened?
The widening of India’s trade deficit with China can be attributed to two factors: 
  • Narrow basket of commodities mostly primary for exporting to China
  • Lack of market access for most of India’s agricultural products and the sectors where India is competitive such as pharmaceuticals and IT.

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