India-China trade falls 7pc as diplomatic chill takes hold to darken prospects
A GROWING chill in the diplomatic climate, plus the impact of the Covid-19 pandemic, has resulted in a seven cent fall in trade between India and China this year - the steepest decline since 2013
A GROWING chill in the diplomatic climate, plus the impact of the Covid-19 pandemic, has resulted in a seven cent fall in trade between India and China this year - the steepest decline since 2013. reports Mumbai's Business Today.
This is a sharp reversal from the 3.2 per cent growth in trade in 2018-19 and the more robust 22 per cent jump in 2018, signalling the prevailing anti-China sentiment in the country.
Import substitution of electronics going into TVs, refrigerators, ACs, washing machines and mobile phones caused a US$1.5 billion drop in imports from China this year. Other items that registered a decline include mineral fuels, mineral oils, pharma and chemicals.
Bilateral trade with mainland China alone registered a six per cent decline in 2020 to $81.86 billion. This was the first time ever that trade with mainland China declined for the second consecutive year. In the previous year, it had declined by two per cent. The rate of contraction in bilateral trade in 2020 was the steepest since 2012-13 when it had declined by 10.5 per cent.
At the same time, bilateral trade with Hong Kong - another big trade partner for India, fell by an even sharper 10.17 per cent in 2020. Like in the case of mainland China, this was again the steepest decline since 2013 when it fell 14 per cent.
The fall in trade with mainland China has also resulted in a narrowing of the trade deficit between the two. It is now under $50 billion mark for the first time in five years at $48.66 billion.
Mainland China was India's largest trading partner between fiscals 2014 and 2018 but became number two in 2018-19 when US overtook it.