India’s imports of Chinese laser machinery totalled US$174.57 million in 2022, according to the Post’s calculations using data from India’s Ministry of Commerce and Industry.
4 things to ponder as India overtakes China as most populous nation
4 things to ponder as India overtakes China as most populous nation
And India had imported US$167.93 million worth of Chinese laser machinery in the first 10 months of 2023, up from US$147 million a year earlier, the data showed.
At least 32 types of Chinese goods, including consumer goods, machinery and chemical products, have been targeted by India.
For its part, the Ministry of Commerce in Beijing is conducting two inquiries into an insecticide ingredient and a pigment and pesticide ingredient from India.
China is better off with India’s increasing dependence and Beijing doesn’t want to rock the boat
In February, Beijing also ruled that an Indian phthalocyanine pigment constituted dumping and imposed duties of between 11.9 and 30.7 per cent.
Dumping is usually seen when goods enter a country’s market during the regular trade process at a price below the normal value in the exporter’s domestic market.
“[A trade war] is unlikely as India’s dependence on China continues to grow. India’s deficit is ballooning, but it’s more expensive to import from the United States, Europe or elsewhere,” said Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis.
“The trade ties are not symmetric. China is better off with India’s increasing dependence and Beijing doesn’t want to rock the boat, fearing India gets into de-risking like the US and EU.”
Have China-India economic ties changed 2 years on from the Galwan border clash?
Have China-India economic ties changed 2 years on from the Galwan border clash?
Despite the tensions, the popularity of Chinese goods in India is enduring, with a survey by community network LocalCircles showing 55 per cent of the 7,000 Indians surveyed said they had bought Chinese products in the past year, Indian media reported earlier this month.
Smartphones, smartwatches and power banks were the most popular Chinese goods, the survey showed.
The survey also found that despite the influence of anti-China sentiment and the growing competition from home-grown brands, Chinese small appliances and accessories remained the preferred choice for Indian consumers.
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No explanation as China’s Xi Jinping unexpectedly skips speech at Brics business forum
No explanation as China’s Xi Jinping unexpectedly skips speech at Brics business forum
India is also a member of the Indo-Pacific Economic Framework for Prosperity, a strategy led by Washington to exclude Beijing from key supply chains.
The concern for India is its burgeoning trade deficit with China, which stood at US$83 billion in 2022, up by 89 per cent from a year earlier, and accounting for a third of its total.
China’s trade with India grew by 0.8 per cent, year on year, in the first 11 months in 2023, with its exports representing over 86 per cent of the US$124.3 billion overall total and its trade surplus reaching to US$90.27 billion.
At a G20 meeting in New Delhi in August, Indian trade and commerce minister Piyush Goyal asked how China could “supply goods at a rate lower than the cost of raw materials”.
India’s exports are substitutable and less lucrative
And Divya Murali, a research analyst with the Institute of South Asian Studies at the National University of Singapore, said current trade inquiries were a viable way for India to address its concerns.
“China had not resorted to retaliatory measures, [which] indicated India’s moves were not escalatory in the first place,” Murali said.
Renu Singh, a researcher with the Institute for Emerging Market Studies at the Hong Kong University of Science and Technology, said the trade deficit is driven by the fact China exports value-added, intermediate goods like electronics, while India ships resource-intensive, primary products, including petroleum products, agricultural goods and metals.
“India’s exports are substitutable and less lucrative,” she said.
India, though, is betting on bolstering its domestic manufacturing sector amid efforts by global investors to diversify.
“If India starts de-risking, then Chinese exporters may lose India’s market that they increasingly dominate,” added Natixis’ Garcia-Herrero.
“What’s more, India may set an example for the Global South and other developing countries.”