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- $ 19 billion was exported to China in 2020.
- US second and UAE third largest trading partner
Last year, China remained India’s largest business partner despite tensions in diplomatic relations due to tensions at the border. This is because large part of the requirement of heavy machinery in India is met by imports. According to the provisional figures of the Commerce Ministry, trade between the two countries stood at $ 77.7 billion in 2020 from $ 85.5 billion in 2019.
America is the second largest trading partner
The United States has been India’s second largest trading partner last year. He had a bilateral trade of $ 75.9 billion last year. This was due to the slowdown in international trade due to Kovid-19. Last year, imports from China totaled $ 58.7 billion, higher than imports from both the United States and the United Arab Emirates (UAE). The United Arab Emirates is India’s third largest trading partner.
Heavy machinery accounted for 51% of imports from China.
The government last year banned dozens of Chinese apps and increased scrutiny of investment proposals from neighboring countries. However, India’s dependence on China’s heavy machinery, telecom equipment and home appliances remained amid slogans of increasing the use of indigenous goods. Heavy machinery accounted for 51% of imports from China last year. India’s trade deficit with China reached a record $ 40 billion last year.
Exports to China grew by 11% last year
As for exports to China, it grew by 11% last year. In 2020 $ 19 billion was exported to the neighboring country. In such a situation, if the tension in both the countries increases further, then the earnings from exports to India will decrease.
Ambition to increase manufacturing capacity hurt
India’s tense ambition to increase manufacturing capacity has also been hit by strained relations with China. In fact, Taiwanese companies needing the help of Chinese engineers to help them set up factories here are getting delayed in getting visas. Taiwanese companies are setting up factories under the Production Linked Incentive Plan (PLI) to promote local manufacturing.
India’s dependence on China will remain for four to five years
According to economist Amitendu Palit, an expert on international trade and investment at the National University of Singapore, India still has a lot to do to reduce its dependence on China. He said, ‘It will take at least four to five years to achieve strong production capacity in select sectors through PLI schemes. Till then India’s dependence on China will remain.