India-China trade climbs to USD 135.98 bn in 2022, trade deficit crosses USD 100 bn for the first time
The trade between the two countries continued to boom despite border tensions
The trade between India and China touched an all-time high of USD 135.98 billion in 2022, while New Delhi's trade deficit with Beijing crossed the USD 100 billion mark for the first time despite frosty bilateral relations, according to data released by the Chinese customs on Friday.
The total India-China trade for 2022 has climbed to 135.98 billion, overtaking the USD 125 billion mark a year earlier by registering a rise of 8.4 per, the annual Chinese customs data said.
China's exports to India climbed to USD 118.5 billion, a year-on-year increase of 21.7 per cent. During 2022, China's imports from India dwindled to USD 17.48 billion, a year-on-year decline of 37.9 per cent. The trade deficit for India stood at USD 101.02 billion, crossing the 2021 figure of USD 69.38 billion.
This is the first time the trade deficit, a serious concern constantly expressed by India, has crossed the USD 100 billion mark. In 2021, the overall trade with China totalled USD 125.62 billion, an increase of 43.32 per cent year on year crossing the USD 100 billion mark for the first time.
The trade deficit in 2021 stood at USD 69.56 billion as India's imports from China witnessed an increase of 46.14 per cent to reach USD 97.59 billion. India's exports to China increased by 34.28 per cent year on year to reach USD 28.03 billion in 2021.
The trade between the two countries continued to boom despite border tensions following the military standoff in eastern Ladakh in May 2020.
According to an official brief on trade posted on the Indian Embassy website in Beijing, the rapid expansion of India-China bilateral trade since the beginning of this century has propelled China to emerge as India's largest goods trading partner by 2008.
Since the beginning of the last decade, bilateral trade between the two countries has recorded exponential growth. From 2015 to 2021, India-China bilateral trade grew by 75.30 per cent, an average yearly growth of 12.55 per cent, it said.
Officials say that while trade with China thrived on the availability of cheap Chinese goods to India, it has continuously resulted in the spiralling trade deficit India had with any other country.
“Our trade deficit concerns are two-pronged. One is the actual size of the deficit. Two is the fact that the imbalance has continuously been widening year after year,” the Embassy brief said.
“The growth of trade deficit with China could be attributed to two factors: narrow basket of commodities, mostly primary, that we export to China and second, market access impediments for most of our agricultural products and the sectors where we are competitive in, such as pharmaceuticals, IT/ITES,” it said.
Despite placating statements to address India’s concerns, China has not taken any major steps to open up pharma and IT sectors to Indian exports despite widespread demand. Demand for Indian cancer drugs was so predominant in China that a film highlighting the plight of cancer patients and their attempts to get the drugs from India struck a chord with the Chinese public. In recent years, reports said China has officially cleared some Indian drugs but not much is heard of the market access to them.
On the decline of Indian exports to China, the Indian Embassy brief said “our predominant exports have consisted of iron ore, cotton, copper, aluminium and diamonds/ natural gems”.
“Over time, these raw material-based commodities have been overshadowed by Chinese exports of machinery, power-related equipment, telecom equipment, organic chemicals and fertilisers. We continue to engage the Chinese side to address market access issues,” it said.
The data released by the Chinese customs on Friday said China’s global trade flourished despite the weakening of the US and European demand and the COVID-19 controls leading to periodic shutdowns of several cities including Shanghai, China posted a trade surplus of USD 877.6 billion in 2022.
As per the customs data, China's overall exports in 2022 rose by seven per cent and imports rose by 1.1 per cent, while China's trade surplus last year stood at USD 877.6 billion. China's exports increased to USD 3.95 trillion, decreasing from 2021's high growth of 29.9 per cent while imports increased by 1.1 per cent to USD 2.7 trillion, compared to the previous year's 30.1 per cent rise.