Elephants & Dragons

The Import/Export war between India and China.

· 2 min read
Elephants & Dragons

After the violent clashes between Delhi and Beijing on 15th June 2020, India showed the confidence to stand solo in front of China on both the economic as well as the military front.

According to a report released by the European Foundation for South Asian Studies (EFSAS) India’s steps to tackle all Chinese intrusion on the LAC was praised vehemently. Currently, Delhi is dealing with Beijing both on military as well as on economic forefront. The PM’s Atmanirbhar Bharat Yojana will act as a catalyst not only in making the nation more self-reliant but also in creating a lot of opportunities on ground.

After casualties & violence on the LAC, Delhi is making its policies way more concrete with SAARC countries. In April, the Indian government tightened FDI norms on countries which share a land border with India. However, the concern on trade deficit between both the countries is still on the table.The trade deficit of India with China is estimated to have narrowed down to $48.7 billion during the last fiscal year and has contracted by 9.17 % as compared to the deficit of a year ago.

Currently India’s main imports from China include clocks and watches, musical instruments, toys, sports goods, furniture, mattresses, plastics, electrical machinery, electronic equipment, chemicals, iron and steel items, fertilisers, mineral fuel and metals.

India imports around 4044 products from China out of which 3,326 (consist of 90% of overall import) are not very competitive and India can easily import these from other countries as well. Remaining 10% of the products (around 327) come under a highly sensitive category. This highly sensitive category consists of around $53.6 USD and can be divided into 6 sub-categories on the basis of the import availability from other counties.

Amount of Sensitive Import (USD)

Importable from other countries (%)

3.7

100%

3.8

72.6%

4.2

35.9%

10.7

14.2%

28.2

1.2%

2.8%

No Option

53.6 (Total)

 

Delhi is looking for other alternatives for its imports other than Beijing. This will not only strengthen the relationship of Delhi with other countries but also reduce the dependency of its imports from China. Some alternatives of these products are as follows -

Products Imported from China

As a% of Overall Domestic Consumption

Other Options

Cell Phones

11%

France, Germany

Electrical Goods

3.4%

South Korea, Italy

Photosensitive Products

3.4%

South Korea, Italy

A.D.P. Machines

3.2%

Netherlands, Canada

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