Who says trade with China reduced
In the last few months there has been a lot of talk about cutting off economic ties with China and some even went to the extent of stalling all imports. Fuelled by patriotic fervour, anger after the border standoff and China’s allegedly silent stance of not reporting to the WHO on the coronavirus issue led to an aggressive standpoint by one and all.
Patriotism notwithstanding, the economy however does not function on emotions. In spite of the Government of India banning hundreds of Chinese Apps and officials speaking about lessening trade with China, it still holds the status of Most Favoured Nation (MFN) with India. So much so, it was informed in Lok Sabha that there are no plans as of now to withdraw the MFN status.
Imports from China are critical for several sectors, the inputs and raw materials for various industries are crucial. The total value of India’s trade during this period i.e. April-July’2020 was USD 164.66 billion.
The total trade with China during the first four months of 2020-21 is USD 23.88 billion compared to that of USD 29.03 billion in 2019-20. Trade with China during the first four months of 2020-21 constituted 14.5% of India’s overall trade compared to 10.5% during the same period in 2019-20.
India has to depend on China for electronics components, telecom instruments, industrial machinery, chemicals and several materials in the pharmaceutical sector. Plastic is another area where exports to China have grown.
During the April-July period, exports to China rose by 31 per cent with a total value of $7.3 billion. It would take a few years for India to become self-dependent at least in items such as active pharmaceutical ingredients for medicines and electrical equipment. For the tie being that it could well cut back on toys, crackers and plastic.
