MUMBAI:
China’s place as India’s top import source nation has remained unchallenged for decades. And, according to a report by Global Trade Research Initiative on April 29, inbound shipments are set to rise further, especially due to dependence on Beijing for industrial products and parts for new and emerging sectors such as Electric Vehicles (EVs).
GTRI is a private research think tank based out of India.
“So far, imports were carried out by Indian firms. Now with the entry of Chinese firms in Indian market, India’s industrial product imports are set to rise at an accelerated pace. As the Chinese firms operating in India will prefer sourcing most requirements from their parent firms, Indian imports will rise sharply,” the GTRI report said.
To be sure, the likely decision to not extend tax concessions under India’s electric vehicle (EV) policy to Chinese companies, as reported by Moneycontrol on April 22, may help tackle the fallout of this, but GTRI warns that reliance on parts for this sector from Beijing may also increase the import dependency.
Chinese companies are involved in India’s energy, telecommunications, and transportation sectors. They play critical role in smartphone, electronics, electric and passenger vehicles, Solar energy, engineering projects and many other sectors.
According to data from commerce ministry, India’s imports from China grew 3.6 percent on-year to nearly $94 billion in April-February of 2023-24. Compare this to the value of inbound shipments with the nation in the second spot – Russia, which was around a half at $55.6 billion during the same period.
Though, India saw a faster pace of growth in imports from Moscow at 36.6 percent during April-February FY24, inbound shipments from other key nations such as United Arab Emirates, USA and Saudi Arabia witnessed large contractions.
