India – China Economic Relations

Editorial Analysis for UPSC - Himachal Pradesh Statehood

India – China Economic Relations



  • India’s imports from China rose to $97.5 billion in calendar year 2021, up 46.1 per cent from imports worth $66.7 billion in 2020, which was impacted by Covid-19related restrictions, as per data from the China General Administration of Customs.
  • Imports were up 30.3 per cent over 2019, which was not impacted by the pandemic. India’s total trade with China was $125.7 billion in the 2021.



Some of India’s key imports from China:

  1. Smartphones, components for smartphones
  2. Automobiles,
  3. Telecom equipment,
  4. Plastic and metallic goods,
  5. Active pharmaceutical ingredients (APIs), and other chemicals.


  • Officials at the Commerce Ministry have, however, pointed out earlier in this fiscal that growth in India’s trade with other key trading partners including the US, UAE and Australia was even higher than the growth in trade with China.
  • India is currently in the process of negotiating Free Trade Agreements (FTAs) with the UAE, EU, UK and Australia.


What is the growth of Indian exports to China?

  • India’s exports to China grew to $28.1 billion in calendar year 2021, up 34.9 per cent from exports worth $20.9 billion. .
  • Raw material exports constitute a significant portion of India’s outbound trade with China with iron ore, organic chemicals and cotton figuring among key export items. Other key exports to China include iron and steel, seafood and engineering goods.


Measures to curb imports from China:

  • Soon after clashes in Ladakh’s Galwan Valley, the Power Ministry imposed a de facto ban on the import of power equipment from China citing cybersecurity concerns.
  • The government also asked state-owned telecommunication companies, BSNL and MTNL, to exclude Chinese telecom equipment firms including Huaweiand ZTE from its network upgrading process.
  • The government also modified foreign direct investment (FDI) rules making the Centre’s approval a must for any FDI in Indian firms from neighbouring countries apparently aimed at preventing opportunistic takeovers of domestic firms by Chinese companies during the pandemic.
  • India has also tightened a watch on dumping of goods from China in India.
  • In December 2021 India imposed anti-dumping duties on five Chinese products, including certain aluminium goods and chemicals, for five years to protect local manufacturers.

        Source The Hindu