India is selling more manufactured goods to China, with electronics emerging as a bright spot in a trade relationship that remains overwhelmingly tilted in Beijing’s favor.
Indian exports to China rose almost 40% in the five months through August, an analysis of government data shows, with electronics and engineering goods among the biggest drivers. Industry executives in India say demand created by the global AI and data-center build-out is contributing to some of the growth.
The figures show exports to China tripled to $3.18 billion in the fiscal year ended March, driven by products including printed circuit board assemblies, smartphones, display modules and telecom equipment. Electronics shipments have continued to rise this fiscal year, climbing more than 15% in the April-August period from a year earlier.
The increase, however, comes off a relatively low base and has done little to narrow India’s vast trade imbalance with its neighbor.
“The surge in exports to China is partly driven by pressure on suppliers to meet the demand for high-end equipment required for AI-related products and as data centers proliferate,” said Rajoo Goel, secretary general of the Electronic Industries Association of India. “This has encouraged exports of electronics from India to China.”
For New Delhi, the recent gains offer some support for a years-long effort to expand manufacturing and secure a bigger role in global supply chains. It also comes as India and China seek to repair relations from a multi-decade low, while Washington’s tariff policies give the two governments another incentive to deepen economic engagement.
“It shows that Indian manufacturing is beginning to win credibility in one of the world’s most competitive global value chains,” said Pankaj Mohindroo, chairman of Indian Cellular and Electronics Association.
The increase in exports, while still small, suggests Beijing may be becoming more receptive to Indian goods in the current geopolitical environment, said Arun Kumar Garodia, managing director at Corona Steel Industry Pvt.
There is an important wrinkle in the numbers, however.
Chinese customs data don’t record a comparable increase in printed circuit boards arriving from India, with much of the rise instead showing up under smartphones and other telecom products. Differences is how the two countries classify goods probably make it difficult to determine precisely what is behind the increase, according to industry executives.
Besides, China remains a relatively small destination for Indian goods, accounting for 4.4% of exports in the year-ended March, compared with just over 3% a year earlier. The US, India’s biggest market, takes almost a fifth.
The recent gains in exports also barely dent the imbalance between Asia’s two biggest economies. India imported $131.6 billion of Chinese goods in the year ended March, accounting for almost 17% of its imports and vastly exceeding the value of goods it sold to China.
Yet, exporters are confident Indian shipment to China will continue to grow. The latest figures showed the gains extended beyond electronics. Engineering exports to China increased about 21% in the April-August period from a year earlier, including machinery and parts, auto components and hand tools, according to exporters.
“The task now is to sustain these exports and expand across components, sub-assemblies and finished products, while deepening Indian design and component capabilities,” Mohindroo added.
Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.
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