The Indian government has announced that China’s share in India’s import basket has decreased to 13.79% in the current fiscal year 2022-23, a drop from the previous year. The government has been working on reducing its dependence on Chinese imports, particularly in the aftermath of the border dispute between the two countries.
According to data from the Ministry of Commerce and Industry, it’s share in India’s overall imports stood at 14.68% in the previous fiscal year, FY22. However, in the current fiscal year, the share has declined to 13.79%, marking a decrease of nearly 1%.
The decline in it’s share is primarily due to India’s efforts to diversify its imports and reduce its dependence on a single country. The government has been promoting the “Atmanirbhar Bharat” (self-reliant India) initiative, which aims to boost domestic manufacturing and reduce imports.
As part of this initiative, the government has launched several schemes to encourage local production, including the production-linked incentive (PLI) scheme, which provides financial incentives to companies to manufacture goods locally.
The government has also imposed tariffs and non-tariff barriers on imports from China, in order to protect domestic industries and reduce the trade deficit with China.
In recent years, India has been trying to reduce its dependence on Chinese imports, particularly in sectors such as electronics, pharmaceuticals, and chemicals. China is the largest source of imports for India in these sectors.
According to data from the Ministry of Commerce and Industry, India’s imports from China stood at $62.7 billion in FY22, a decline of 4.8% from the previous year. India’s imports from China in the current fiscal year are expected to decline further.
The decline in India’s imports from China has been welcomed by Indian industry, which sees it as an opportunity to promote domestic manufacturing and reduce dependence on imports.
Dilip Chenoy, Secretary General of the Federation of Indian Chambers of Commerce and Industry (FICCI), said, “The decline in imports from China is a positive development for India’s economy. It will encourage domestic manufacturing and boost self-reliance.”
However, some experts have cautioned that reducing imports from China may not be easy, given China’s dominance in global supply chains and its competitiveness in several sectors.
Dharmakirti Joshi, Chief Economist at CRISIL, said, “Reducing dependence on Chinese imports will require a concerted effort by the government and industry. It will also require India to become more competitive in sectors where China has a competitive advantage.”
The decline in China’s share in India’s import basket comes at a time when the two countries are trying to improve their bilateral ties, which have been strained in recent years due to a border dispute and trade tensions.
In October 2021, the two countries had agreed to establish a hotline between their foreign ministers, in order to improve communication and reduce tensions. The two sides have also been holding talks on the border dispute, although progress has been slow.
The decline in China’s share in India’s import basket is also likely to have an impact on India’s overall trade balance. India has been running a trade deficit with China for several years, which has been a cause for concern for the government.
In FY22, India’s trade deficit with China stood at $48.66 billion, which was lower than the previous year. However, the decline in imports from China is likely to further reduce the trade deficit. The government has taken several steps to diversify its import sources, such as by encouraging domestic manufacturing and seeking alternative suppliers. India is also working on a number of initiatives with countries such as Japan, South Korea, and the United States for collaboration in areas like trade, investment and technology transfer.
The government has been taking several measures to boost exports, in order to reduce the trade deficit. These measures include providing financial incentives to exporters, improving infrastructure, and promoting exports of high-value goods.
