After boycott of Chinese goods calls for the India-Chinese exports to India crashed by 24.7 percent. India china trade drops by 18.6 percent. China imports from India rose by 6.7 percent statistical data and of course an economic job to china.
As far as the boycott of the India china calls were concerned after the border clash with India and china troops, these calls of boycotting china on the economic front erupted in the entire country and therefore now we can see these statistics emerging.
As far as the economic jolt to china is concerned, Chinese exports to India crashed by 24.7 percent. On the other side India china trade drops by 18.6 percent and also Chinese imports from India rise by six point seven percent.
A couple of months to go for Diwali but in the bazaars with the shopkeeper’s preparations and stock taking is already underway there was a promise that was made by certain members of the trader community that this deepavali will be china-free deepavali.
They will push for at least 3 000 goods which will be finished goods made in India and it’s not only the traders it’s not only the manufacturers but the biggest difference is that the china word or the c word associated with goods is making them unwanted.
The buyers are now saying it’s about new and strong mind-sets on china on Chinese goods on the fact that at multiple levels they wreak havoc on the Indian market. Fancy lights and fireworks and even idols a year back the Chinese version got a decent response all that has undergone a sea change this year.
The boycott china calls have found much reception in India and obviously the pal table effect is also visible in china as well where the imports have actually died down and so have the exports from India. Given the situation between the two countries of us now it is clear that trade ties are the first thing to take a hit here because obviously on a diplomatic and defence level.
So what the countries are discussing and the reports are coming in. It looks like while both the sites are actually promising to keep the situation well within control but it looks like on ground actually.
The trade is facing a massive backlash. India is leaving no stone unturned and beat these small scale enterprises or beat huge industries begin. Bigger industries like railways and steel manufacturing and other sectors including pharmaceuticals. The boycott china tractor is receiving much attention and much reception and hence the numbers have down in the days to come.
Obviously for the confidence building measures if they kick in and these will be the trade ties which need to be revived first. But as of now when it comes to you know the use of either the technologies coming out of china or for that matter the use of spare parts coming out from Beijing all these things are witnessing as of now a slump. Hence the figures are speaking about the recessionary approach in the business ties between china and India.
The dependence on Chinese supply chains has led to a hollowing out of local and domestic manufacturing and in India’s case even handicrafts. A lot of small scale businesses have gone out of operation because of a flood of Chinese imports that have been freely made available and also Chinese raw materials for a large segment of industry including the all-important pharma industry just because it is a little cheaper.
Our industries have come and bought Chinese and in the process the domestic industry has suffered and I may point out that a large part of the cost of domestic industry is because of the high taxes and regulations that are there in India. So I think it’s important for the government to lower taxes lower regulations so that Indian domestic manufacturer can compete with china and with other countries.
Foreign market sentiment is one thing but here’s a fact check on the ground beyond Diwali. 75 of India’s toy imports come from china. it’s 68- 78 of solar cell imports are from china. 55 percent of capital goods imports. 50 percent of electrical and electronic equipment imports. 45 of consumer durables. 40 of leather goods imports but Indian trade associations are clear on the fact that Chinese goods fall way short of essential quality standards an aspect.
Indians have now woken up to and are proactive against foreign poor quality. frequently fake and dangerous and above all feeding the enemy it’s a lesson. Indians are now alert to indications enough that India can hope for this Diwali and wants to come being china maal freedom.
What China Imports from India? What India Exports to China?
China is known as the world’s factory for a reason. Over the past several decades Chinese trade has expanded at a breakneck pace. In 1995 the value of china’s imports and exports of goods totalled $280.9 Billion or 3% of global trade. By 2018 its total trade in goods had jumped to $4.6 Trillion or 12.4% of global trade. While these are the global figures of china, let’s take a deep dive into India-china trade.
let’s find out what china imports from India?
India has a country lacks when it comes to exporting goods. China on the other hand is the leader of exports in the world. The Chinese exports to India in 2019 amounted to $74.72 billion whereas India’s exports to china amounted to $17.95 Billion in 2019. The trade deficit between India and china in 2019 was $56.77 Billion despite having such huge trade deficit people tend to forget this topic.
India’s overall import with china is 14.37% making china the largest source of our imports whereas exports to china from India accounts for only 5.47% making it the third largest importer of India behind USA and UAE currently.
Iron ore accounts for 53% of exports to china from India. Iron ore is the most important good; that is required for basically building anything be it a tall building, a c-link bridge or even factories. India does well when it comes to export of iron ore but certainly it cannot rely on only iron ore for decreasing the trade deficit.
Next main commodity that china imports from India is cotton yarn. India is the world’s largest exporter of cotton yarn and china is in that list of importers of yarn as well around 12% of the total exports to china comes from cotton yarn. One of the biggest commodities that India exports to the world is petroleum. And china is the world’s largest importer of petroleum. But, the exports in petroleum have seen some major declines in the past couple of years.
Currently, Petroleum accounts for 9% of total exports to china. China is also the biggest importer of refined copper in the world it is mainly used as a raw material for various electronic equipment’s .
India’s copper export to china accounts for 6.3% to total export goods such as granite, puffery, basalt, sandstone, and other monumental or building stone accounts for 5.35% of total export to china next vegetable oils and fats account for 3.7% for exports coming as a surprise India exports human hair, wool, or other animal hair prepared for use in making wigs. This accounts for 2.27% for total exports to china.
Next up pharmaceuticals India is one of the leading exporters of medicines and during this pandemic India is going to play an important role in making the vaccines available to the world. While china has a strong pharmaceuticals industry it still isn’t as good as India’s.
We Indians love gems and jewels but we are not the only one with this liking china likes them as well and India does export these precious gems and jewels to china other items in the list are Auto engine, components and automobiles agricultural products like grains, tobacco, and oil-seeds, marine foods, electrical equipment, etc. India is not perfect and lags behind in trade.
In simple terms: We import a lot and export very less in order to increase our GDP and face the economic slowdown caused by COVID-19 India needs to ramp up its exports china is among India’s biggest trading partners but we buy more and sell less This needs to change if we want to replace china as the world’s factory India needs to take some big steps.
How economically linked are India and China?
Over the past 70 years’ china and India have been battlefield enemies, wary neighbours at times on friendlier terms and more often than not regional rivals. But they have managed to forge solid economic links. They are the two largest economies in Asia with a rich 2,000-year long history full of economic religious and cultural ties.
Dating back to the days of the ancient silk road their relationship has been complex with territorial disputes that even led to a war in 1962 and clashes that led to military deaths. Along their disputed border as recently as June 2020 but despite the political tension Beijing and new Delhi have certainly not ignored each other economically.
India runs a trade deficit with china meaning what it imports is worth more than what it exports to the country. It often imports more from china than anywhere else in the world. And china is an important destination for Indian exports. But the view is different from china’s side. China imports relatively little from India.
Although India does remain a moderately important export market there’s always been more of a protectionist sentiment in India. Concerned about china really being a competitor and nodding not wanting to rely on them too much. Of course there’s also a bigger geopolitics at play where India wants to balance Chinese interests with being more closely allied to the united states and western countries.
The other thing, even though they’re neighbouring, the infrastructure between the direct infrastructure is that connects India and china. It’s this is the mountains right. There’s not huge highways. So the cost of transporting directly across that border is not that small and china’s population is not on that side of the country.
It’s on the coast. It’s not so obvious that just because they’re next to each other we should expect the amount of trade volume that we see. Let’s say between the U.S and Mexico. India imports a variety of things from china including plastics electrical machinery also parts. Electronics like mobile phones and pharmaceutical chemicals. It sends to china things like iron ore, steel, cotton and fish.
In fact, in the first half of 2020, Chinese purchases of Indian ore reached an 8-year high investment tends to flow from china into India. Rather than the other way round and in recent years it’s grown. The American enterprise institute says that Chinese investment in contracts in 2019 totalled 7.3 billion US dollars compared to 1.36 billion in 2009. It’s currently quite contentious.
In April the Indian government decided that any investments Chinese firms wish to make in the country would need official approval. It’s a protectionist measure that governments sometimes use to prevent foreign companies from acquiring domestic ones. There is also some fear that Chinese firms might use the current economic situation during the pandemic to dominate certain industries.
Chinese companies also have a stake in around two-thirds of Indian start-ups but china can be viewed as both a resource for Indian firms and a potential rival. India has been resistant to get on board with major Chinese geo-economic projects such as Beijing’s multi-billion-dollar infrastructure development plan. The belt and road initiative but the tech industry is where India and china are quite intertwined.
China has invested around 4 billion in India’s tech company since 2015 and Chinese smartphone companies according to the gateway house. Think tank control an estimated 72 percent of the Indian markets but would take talk in over 200 other Chinese apps. No bad what effect might that have well. I don’t think there’s anything special about tech that will make it less susceptible to protectionism or other efforts.
In fact, to some extent it’s a bit more sensitive. These days, because of the security concerns related to tech and information. That said i think there’s enormous benefit for India to engage china in the tech sectors. Of course you can say banning tick tock doesn’t really hurt the economy from an income sense but economists think of consumer welfare as a real part of the economy.
And so there’s enormous harm to Indian consumers by not giving them access to apps that they enjoy for instance. India is a major global player in the pharmaceutical industry but it gets most of the ingredients to make medical products from china. India overall gets about 70 percent of its supply of active pharmaceutical ingredients from china and relies on it for over 90 of ingredients for drugs like paracetamol and amoxicillin.
If you are looking for the brains which allow a lot of these genetic drugs to be manufactured that still is in India. But certainly if you are looking at the raw material that certainly comes from china. That is one example where the industry per se has had a lot of healthy interaction in terms of fairly robust supply chains that allow the Indian pharmaceutical sector to flourish.
That’s not something that is easily replicable by other countries. So even though china has active pharmaceutical ingredients they are not in a position to simply replicate the position of dominance or at least the position of superior performance that India has in this particular sector. So what do the experts think about the future economic relationship between these two Asian superpowers.
If we go further down this path of action, retaliatory action and so on that might also be an option that the Chinese start using retaliatory action then you might start going down a path which might have a life of its own and that may not auger. Well in terms of the overall needs for economic development and growth that both countries have, the Indian and Chinese relationship is complex.
The main point I really want to emphasize is that these are two of the largest economies in the world and the other one is the United States’ single economies and so all of these countries have a very strong interest to engage each other economically. Because obviously if you just close yourself off there’s going to be many opportunities that are lost both in terms of financing and in terms of trade comparative advantage.
It would be really unfortunate if the countries could not find a political space to engage in a productive way with each other. Relations between India and china may seem to be at an impasse given recent events along their disputed border but it seems that politics rather than economics is preventing them from taking their relationship to the next level.