India-China trade deficit: Tackling growing imbalance

The trade deficit between India and China has emerged as a major concern on the global stage, highlighting an increasingly unbalanced bilateral trade relationship and its implications.

- SOVINI MONDAL, SOURYABRATA MOHAPATRA

As India’s golden era of development, referred to as “Amrit Kaal”, it is crucial to consider multiple factors to achieve its ambitious goals. Among these, trade dynamics hold a central role, with China being India’s largest trading partner and its reliance on Chinese imports rising significantly—from $102 billion in 2022 to $121.97 billion in 2023. On the other hand, India’s exports to China saw only a modest increase from $15 billion to $16.24 billion over the same period. Based on our analysis of multiple trade databases, we deepdived into the facts of what this growing deficit means for India’s economic future. Can India continue to depend so heavily on Chinese imports without compromising its own strategic goals?

India’s key imports from China mainly include electronic gadgets, machinery, nuclear reactors, and chemicals, which are essential for Indian industries. As per a report by the Global Trade Research Initiative (GTRI), India’s dependence on these imports has risen from 21% to 30% over the past 15 years. These imports make up more than 70% of India’s total imports from China.