BEIJING: Led by mobile phones and computers, China’s share in India’s total imports has risen to 15.1 per cent so far in the current financial year (April-August 2015). Between 2010-11 and 2014-15, the country’s share in India’s import basket grew rapidly from 11.8 per cent to 13.5 per cent. This makes China the largest exporter to India.
A slowdown in China might do little to reverse this trend, as long as India’s burgeoning middle class’ appetite for consumer durables continues, says Biswajit Dhar, trade expert and a professor at Jawaharlal Nehru University.
The overall trade between the two countries has steadily risen from $57.65 billion in 2011-12 to $72.3 billion in 2014-15. During the April-August period, total trade stands at $29.2 billion. However, this growing trade relationship is because of the rapid growth in India’s imports from China. Of the total trade of $72.3 billion in 2014-15 between the two countries, India imported goods worth $60.4 billion, while exports to China were a mere $11.9 billion.
So far in FY16, Saudi Arabia has been the second-largest exporter to India. But it is a distant second at $9.8 billion, or 5.8 per cent of total imports.
While many expect China’s export growth to slow down as a consequence of labour scarcity and higher wages, which will lower its competitiveness, its export growth to India is likely to continue unabated. “In spite of a slowdown in China, imports to India have not slowed down. From other countries, we may see a slowdown in imports but we haven’t seen that in China’s case and may not see in the future as well,” says Dhar.
Part of the explanation for this stems from the fact that as a manufacturer of finished products that are being consumed in large numbers, the demand for Chinese manufactured products in India continues to remain unaffected.
