A scuffle broke out last week between Chinese and Indian armed forces at the eastern end of the border, in the first such clash since 2020. Despite the tense bilateral relations between the two neighbouring countries, trade has been flourishing between the two of Asia’s largest economies. Total trade between India and China has increased 29 per cent in the last five years to $115.44 billion in FY22 from $89.72 billion in FY18.
India exported goods worth $422.2 billion to the world in FY22. In this China accounts for more than 5 per cent of India’s total exports. India’s exports to China increased 59 per cent with an export value of $21.2 billion in FY22 from $13.3 billion in FY18. India’s major exports to China include engineering goods ($5.4 billion), agricultural and allied products ($3.8 billion), ores and minerals ($2.9 billion), chemicals and related products ($2.9 billion), and petroleum and crude products ($1.9 billion).
Despite India’s rising exports to China, its trade deficit with China has widened by 16 per cent in the last five years. India’s trade deficit reached $73 billion in FY22 from $63 billion in FY18. This growing trade gap indicates the fact that the rise in India's imports is outpacing its export growth. India’s imports from China registered a growth of 23 per cent in five years, from $76.4 billion in FY18 to $94.2 billion in FY22.
In FY22, China had 15.4 per cent share in India's total imports. India imported goods worth $613.2 billion from the world, including goods worth $94.2 billion from China alone. India’s major imports from China are electronic goods ($35.4 billion), engineering goods ($24.9 billion), chemicals and related products worth $19.6 billion, other manufactured goods ($8.3 billion), and textiles ($2.8 billion).
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