India-China trade deficit soars to $47 bn as business ignores Ladakh crisis, ‘Atmanirbhar’ push

Trade deficit between India and China ballooned to almost $47 billion in just the first nine months of 2021. It stood at $44.02 billion in 2020-21.

The national flags of China and India | Representational Image | Photo: Dhiraj Singh | Bloomberg

New Delhi: The Modi government’s attempts to reduce India’s dependence on goods manufactured in China and push self-reliance alongside since the military confrontation in Ladakh last year does not seem to be making much headway if India-China trade figures are any indication.

While bilateral trade is on track to hit a record-high of $100 billion, New Delhi’s trade deficit with Beijing ballooned to $46.55 billion in the first nine months of this calendar year — higher than the full-year figure in the last fiscal — and is expected to rise further by the end of 2021, according to latest data from China’s General Administration of Customs (GACC).

The trade deficit between the two countries stood at $44.02 billion in 2020-21, according to data shared by the Indian commerce ministry in August. Last fiscal’s trade deficit had actually dipped from $53.57 billion in 2018-19.

The deficit comes as India and China seem set to hit a record-high trade of $100 billion, having already touched $90.37 billion in the first nine months of 2021 — a 49.3 per cent year-on-year rise, according to the Chinese customs data.

These figures come even after a chill in bilateral ties in the aftermath of the Galwan Valley clash in June 2020 and the continuing stand-off on the Line of Actual Control over the last year-and-a-half. The push by the Modi government for an ‘Atmanirbhar’ economy also couldn’t put a pin in the ballooning trade.

The latest figures from China’s GACC also revealed that exports to the US, Beijing’s biggest strategic and economic competitor, jumped 30 per cent to $57.4 billion while imports from the US rose nearly 17 per cent to $15.4 billion.

Steady monthly rise in India-China trade

India-China total trade volume has already touched $90 billion by end September — following a steady trend of trade flow month by month.

According to GACC data, the countries registered a trade flow of $9.9 billion in January, $8.1 billion in February, $9.5 billion in March, $10.5 billion in April, $9.4 billion in May, $9.3 billion in June, $10.02 in July and $11.02 in August.

China was India’s top trading partner in the April-July period, followed by the US, UAE, Saudi Arabia and Singapore, according to data from India’s commerce ministry.

Based on trade data sourced from official agencies in both countries, exports and imports between the countries grew at over 65 per cent in the January-June period this year.

(Edited by Amit Upadhyaya)