Imports from China rising despite the Atmanirbhar Bharat Scheme since 2020.

Posted on : June 2, 2024 By Ayushi

Imports from China rising despite Atmanirbhar Bharat” suggests that despite initiatives like Atmanirbhar Bharat (Self-Reliant India), there’s an increasing trend in importing goods from China. Atmanirbhar Bharat is a policy initiative by the Indian government aimed at promoting self-reliance and reducing dependence on imports, especially from countries like China.

India’s Trade with China Post Pandemic

Imports from China:

In last four years, India’s trade with China has averaged around $86.3 billion, with imports exceeding exports resulting in a trade deficit. While India has taken several steps to bridge the deficit, even though narrower than before, a substantial deficit still exists. In 2020-21, India registered a trade deficit of $44 billion.

A closer look at the composition of trade reveals that India is primarily exporting low-value raw materials and importing high-value manufactured goods from China. In 2020-21, India’s top ten exports to China at the HS-6 classification of traded items included iron ores and concentrates, cotton, light oils and preparations, shrimps and prawns, fruits of the genus capsicum or of the genus Pimenta, parts of telephone sets, telephones for cellular networks, semi-finished products of iron, castor oil and its fractions, and granite. The top ten exports accounted for nearly 40% of India’s total exports to China

At the onset of the global pandemic India’s faced a critical situation in its external factors. The pandemic further resulted in an immediate and substantial impact on international trade. While India’s overall trade flows were consistently declining since 2018-19, the plunge severed further in 2020-21.

Registering a decline of 19%, India’s total trade dipped from $844 billion in 2018-19 to $685 billion in 2020-21. It is no surprise that the pandemic has disrupted trade trends for the country, but an emerging trend can be seen is in the economic relationship between India and China.

Also Read: Barron Trump: Stepping into the Political Arena

China Emerging as Top Business Partner

While India’s trade with several of its trade partners witnessed a decline during the COVID-19 period, its trade with China has increased. Between 2019-20 and 2020-21, while India’s trade with the world declined by 13%, its trade with China increased by 6%. In 2020-21, India’s trade with China stood at $86.4 billion, accounting for a share of 12.62% of India’s total trade with the world. The share of China in India’s trade has in fact been increasing over the last three years. This might seem counter-intuitive considering the recent background of political tensions between the two countries along the Line of Actual Control (LAC).

Atmanirbhar Bharat Scheme

Last year, the government announced a Rs 20 lakh crore economic package under the ‘Atmanirbhar Bharat Abhiyan’ in pursuit of the country to become self-reliant, focusing more on expanding its manufacturing capacity and becoming an epicenter of the global supply chains. Negating all implications targeted towards import protectionism, the scheme is in fact being projected to promote export and increase integration into supply chains.

Posted on : June 2, 2024 By Ayushi