Business & Policy | News & Insights

India’s Dependence on Chinese Goods Soars, Strategic Concerns Abound

Published: May 6, 2024
Author: TEXTILE VALUE CHAIN

A recent report by the Global Trade Research Initiative (GTRI) has revealed that China’s share in India’s imports of industrial goods like telecom, machinery, and electronics has surged to 30% from 21% over the last 15 years. The growing trade deficit with China, which now exceeds $387 billion over five years, has raised concerns about the strategic implications of this dependency on both economic and national security fronts.

The report emphasises the need for India to reevaluate its import strategies and promote diversified and resilient supply chains to reduce dependency on single-country imports, particularly from geopolitical competitor China. Specific sectors where India’s reliance on Chinese goods is increasing significantly include electronics, telecom, machinery, chemicals, pharmaceuticals, iron, steel, textiles, automobiles, and more.

Moreover, the report highlights that Chinese companies have a significant presence in key sectors like energy, telecommunications, transportation, and manufacturing, which could further exacerbate India’s import dependence. With Chinese firms entering the Indian market and potentially dominating industries like electric vehicles, the report stresses the urgency for India to strengthen its industrial capabilities and reduce reliance on Chinese imports to safeguard its economic and national interests.

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