The fissures in the bilateral ties and the prevailing anti-China sentiment notwithstanding following the face-off in eastern Ladakh last year, the trade between India and China has gone up in 2021 by over 70 percent.
According to a Global Times report, “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. Specifically, Chinese exports to India grew 64.1 percent year-on-year from January to May, while imports surged 90.2 percent.”
According to reports, trade grew 55.83% in the first five months of 2021. Imports from China rose 59.13% to $33.49 billion, while exports to China rose 46.09% to $10.41 billion.
This assumes significance since bilateral trade in 2020 declined 5.6 percent to $87.6 billion following escalation of political tension between the two countries. This was the lowest since 2017, according to data from Chinese customs.
Most of the Chinese products that were imported by India were medical equipment which were a necessity amid the raging second wave of the coronavirus pandemic. The Chinese customs authority – the General Administration of Customs (GAC), said that in April, China provided more than 5,000 ventilators, 21,659 oxygen concentrators, more than 21.48 million masks and around 34,000 tons of medicines to India. Global Times in its reports quoted Zha Liyou, consul general of the Chinese Consulate in Kolkata, who said, “A batch of 1,500 oxygen generators had been delivered to West Bengal state, and are well received by locals fighting the pandemic.”
Hua Chunying, Spokesperson of Foreign Ministry of China while addressing a press conference on May 14, talked about various products that were delivered to India while India was battling the second wave.
She said, “In April, China exported to India over 26,000 ventilators and oxygen concentrators, over 15,000 patient monitors and nearly 3,800 tons of medicinal materials and medicines. Relevant Chinese companies have received Indian orders for over 70,000 oxygen concentrators and are working around the clock to deliver them as soon as possible. In addition, India has a strong demand for vaccines raw materials including auxiliary materials. Since the beginning of this year, relevant Chinese enterprises have provided more than 10 tons of such materials to India with more than 20 tons expected to be delivered soon.”
While flourishing trade has brought with it all the advantages such as availability of low priced items in India, it has also led to the biggest single trade deficits India has with any country. In 2019, India’s trade deficit with China stood at US $ 56.95 billion, a minor y-o-y decline of 1.88%, with the trade deficit declining for the first time since 2005.
Talking of the growth in trade deficit with China, the Indian Embassy in Beijing on its website has put out a detailed explanation. “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 in, such as pharmaceuticals, IT/IteS, etc. Our pre-dominant exports have consisted of cotton, copper and diamonds/ natural gems. Over time, these raw material-based commodities have been over-shadowed by Chinese exports of machinery, power-related equipment, telecom, organic chemicals, and fertilizers. We need to engage Chinese continuously for addressing market access issues and hold them to assurances made on this account.”
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