Trade between India and China grew by over 70 percent in 2021, China’s Global Times reported. Trade between the two most populous nations of the world grew to over $48 billion between January and May 2021. The growing trade value comes even as border issues remain an ever-present thorn in bilateral ties.
“Trade between China and India soared 70.1 percent in US dollar terms in the first five months of this year to $48.16 billion, according to Chinese customs data released on Monday (June 7). Specifically, Chinese exports to India grew 64.1% year-on-year from January to May, while imports surged 90.2%,” the state-controlled Global Times reported
China had overtaken the US to become India’s largest trading partner in 2020, with the total India-China trade in the financial year being worth $86.4 billion.
The figures were released by the General Administration of Customs (GAC) in China on June 7.
“If anything, these extraordinary growth rates show that China-India trade has largely shrugged off the impact of the political tensions caused by the border friction last year, bouncing back quickly,” the state media report said.
A large part of the increase in trade was due to the export of medical equipment from China to India as the latter sought to combat the devastating second wave of COVID-19. However, notwithstanding special trade circumstances, India still carries a large portion of a trade deficit in its economic ties with China.
In the financial year 2020-2021, the trade deficit was $44 billion in favour of China. This was a significant reduction of 30.15 percent from the $63 billion trade deficit in favour of China in 2017-18.
The Indian Embassy in Beijing explains that a large portion of the trade deficit is due to trade access for competitive industries and a small variety of goods that are actually able to be traded.
“The growth of trade deficit with China could be attributed to two factors: Narrow basket of commodities, mostly primary, that we export to China, and market access impediments for most of our agricultural products and the sectors where we are competitive, such as pharmaceuticals, IT/IteS, etc. Our predominant exports have consisted of cotton, copper and diamonds or natural gems,” the embassy explains on its website.
(Edited by: By Shoma)