{"id":40907,"date":"2024-05-13T02:57:49","date_gmt":"2024-05-12T21:27:49","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=40907"},"modified":"2025-10-11T15:09:45","modified_gmt":"2025-10-11T09:39:45","slug":"china-reclaims-indias-top-trading-partner-tag","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/china-reclaims-indias-top-trading-partner-tag\/","title":{"rendered":"China reclaims India\u2019s top trading partner tag"},"content":{"rendered":"<h2>What\u2019s in today\u2019s article?<\/h2>\n<ul>\n<li>Why in News?<\/li>\n<li>Bilateral trade between India and China<\/li>\n<li>India \u2013 US bilateral trade<\/li>\n<li>Trade relation with other countries (for 2019 \u2013 2024)<\/li>\n<\/ul>\n<h2>Why in News?<\/h2>\n<p>China has emerged as the largest trading partner of India with USD 118.4 billion two-way commerce in 2023-24, narrowly overtaking the US (India-US two-way trade came in at $118.3 billion in FY24). This has been revealed by the data released by the think tank Global Trade Research Initiative (GTRI).<\/p>\n<p>The US was India\u2019s top trading partner during FY22 and FY23 after China was the top bilateral trading partner in FY21.<\/p>\n<h2>Bilateral trade between India and China<\/h2>\n<ul>\n<li><strong>Statistics<\/strong>\n<ul>\n<li>India\u2019s bilateral trade with China in FY24 stood at $118.4 billion.<\/li>\n<li>India\u2019s imports increased by 3.24 per cent to $101.7 billion and exports rose by 8.7 per cent to $16.67 billion in FY24 compared to FY23.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Surge in imports for China in recent years &#8211; statistics<\/strong>\n<ul>\n<li>Between FY19 and FY24, India\u2019s exports to China witnessed a marginal decline in exports by 0.6 per cent, down from $16.75 billion to $16.66 billion.<\/li>\n<li>However, during the same period, imports from China surged by 44.7 per cent, up from $70.32 billion to $101.75 billion.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Major Imports from China to India<\/strong>\n<ul>\n<li>India\u2019s major imports from China include:\n<ul>\n<li>Electrical, electronic equipment, engineering goods, chemicals and related products, plastics, other manufacturing goods and textiles.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Major Exports from India to China<\/strong>\n<ul>\n<li>India\u2019s major exports to China include engineering goods, agricultural and allied products, ores and minerals, chemicals and related products, Petroleum &amp; crude products etc.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Existing trade deficit<\/strong>\n<ul>\n<li>The balance of trade is highly tilted in favour of China.\u00a0<\/li>\n<li>The growth in imports from China led to an expanding trade deficit, rising from USD 53.57 billion in FY2019 to <strong>USD 85.09 billion in FY2024<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Reasons behind high trade deficit<\/strong>\n<ul>\n<li><strong>Gap between domestic production and demand for various products<\/strong>\n<ul>\n<li>India imports goods to fill the gap between domestic production and supply as well as consumer and demand preferences for various products.<\/li>\n<li>This is the major reason behind India\u2019s extremely high and continuously widening trade deficit.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Export of raw materials while importing finished goods<\/strong>\n<ul>\n<li>India\u2019s predominant exports have consisted of iron ore, cotton, copper, aluminum and diamonds\/natural gems.<\/li>\n<li>However, majority of Chinese exports consist of machinery, power-related equipment, telecom equipment, organic chemicals and fertilizers.<\/li>\n<li>This resulted in decline in total value of India exports to China.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Indian pharmaceutical industry is heavily dependent on APIs from China<\/strong>\n<ul>\n<li>India\u2019s pharmaceutical industry imports about 68% of its active pharmaceutical ingredients (APIs) from China.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Other factors<\/strong>\n<ul>\n<li>A narrow basket of commodities, mostly primary, that India exports to China.<\/li>\n<li>Market access impediments for most Indian agricultural products and competitive markets, such as pharmaceuticals, IT\/ITES etc.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Strategic implications of widening trade deficit<\/strong>\n<ul>\n<li>India trade relations with China have been under scrutiny largely due to India\u2019s dependence on the neighbouring country\u2019s critical products.\n<ul>\n<li>These products include telecom &amp; smartphone parts, pharma, advanced technology components among others.<\/li>\n<li>It should be noted that China is the top supplier in eight major industrial sectors, including machinery, chemicals, pharmaceuticals, and textiles.<\/li>\n<\/ul>\n<\/li>\n<li>In the fast-emerging EV sector too, India\u2019s dependence on China is high as lithium-ion batteries for EVs, imported from China.\n<ul>\n<li>These were valued at $2.2 billion, comprising 75 per cent of such imports, and are critical for India\u2019s electrification of transport.<\/li>\n<\/ul>\n<\/li>\n<li>The strategic implications of this dependency are profound and affects not only economic but national security dimensions.<\/li>\n<li>Now, India has undertaken significant measures to decrease its dependence on China through production linked incentive schemes (<a href=\"https:\/\/vajiramandravi.com\/current-affairs\/pli\/\" target=\"_blank\">PLI<\/a>), anti-dumping duties along with quality control orders.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>India \u2013 US bilateral trade<\/h2>\n<ul>\n<li><strong>Statistics<\/strong>\n<ul>\n<li>India-US two-way trade came in at $118.3 billion in FY24 after exports dipped by 1.32 per cent to $77.5 billion compared to the previous financial year.\u00a0\n<ul>\n<li>During this period, imports also dipped 20 per cent to $40.8 billion.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Recent trend<\/strong>\n<ul>\n<li>During the last five years, trade with the US showed positive growth, with exports increasing significantly by 47.9 per cent from $52.41 billion to $77.52 billion.\u00a0<\/li>\n<li>Imports from the US grew by 14.7 per cent, rising from $35.55 billion to $40.78 billion.\u00a0<\/li>\n<li>This resulted in an <strong>expanded trade surplus for India<\/strong>, which grew from $16.86 billion to $36.74 billion.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Trade relation with other countries (for 2019 \u2013 2024)<\/h2>\n<ul>\n<li>In 2023-24, the UAE with USD 83.6 billion, was the third largest trading partner of India.<\/li>\n<li>It was followed by Russia (USD 65.7 billion), Saudi Arabia (USD 43.4 billion), and Singapore (USD 35.6 billion).<\/li>\n<li><strong>With Russia<\/strong>\n<ul>\n<li>During the last five years, Russia\u2019s trading figures were marked by a dramatic increase, with exports growing by 78.3 per cent from $2.39 billion to $4.26 billion.<\/li>\n<li>On the other hand, imports soared by 952 per cent from $5.84 billion to $61.44 billion, widening the trade deficit from $3.45 billion to $57.18 billion.<\/li>\n<\/ul>\n<\/li>\n<li><strong>With Saudi Arabia<\/strong>\n<ul>\n<li>Saudi Arabia\u2019s exports more than doubled, with a 107.9 per cent increase from $5.56 billion to $11.56 billion.<\/li>\n<li>Imports rose at a slower pace by 11.7 per cent from $28.48 billion to $31.81 billion, which slightly reduced the trade deficit from $22.92 billion to $20.25 billion.<\/li>\n<\/ul>\n<\/li>\n<li><strong>With UAE<\/strong>\n<ul>\n<li>Exports to the UAE rose by 18.3 per cent from $30.13 billion to $35.63 billion, and imports increased substantially by 61.2 per cent from $29.79 billion to $48.02 billion.\u00a0<\/li>\n<li>This shift turned a marginal trade surplus of $0.34 billion in FY19 into a deficit of $12.39 billion by FY24.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3>Q.1. What are Active pharmaceutical ingredients (APIs)?<\/h3>\n<p>Active pharmaceutical ingredients (APIs) are the main ingredients in drugs that produce the desired effect on the body. They are also known as drug substances or pharmacologic substances.<\/p>\n<h3>Q.2. What is Global Trade Research Initiative (GTRI)?<\/h3>\n<p>The Global Trade Research Initiative (GTRI) aims to create jargon-free and high-quality outputs for governments and industry on issues related to trade, technology, and investment. GTRI has provided insights into export and import product markets, and world trade analysis.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/indias-top-trade-partner-china-regains-spot-on-higher-imports-9324553\/\" target=\"_blank\" rel=\"nofollow noopener\">India\u2019s top trade partner: China regains spot on higher imports<\/a> | <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/china-reclaims-top-trading-partner-tag\/articleshow\/110062254.cms\" target=\"_blank\" rel=\"nofollow noopener\">Times of India<\/a> | <a href=\"https:\/\/business.outlookindia.com\/news\/china-largest-trading-partner-india-exports\" target=\"_blank\" rel=\"nofollow noopener\">Outlook<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US was India\u2019s top trading partner during FY22 and FY23 after China was the top partner in FY21.<\/p>\n","protected":false},"author":5,"featured_media":40908,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-40907","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/40907","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=40907"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/40907\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/40908"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=40907"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=40907"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=40907"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}