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The worrying trade gap with China -CP Chandrasekhar and Jayati Ghosh

-The Hindu Business Line

Policy deficit. The widening trade deficit with China points to a weakness in India’s industrial growth path

It was headline news when Chinese customs statistics at the end of September 2022 indicated that for a second calendar year, India’s trade with China would settle at well above $100 billion. That was only partly because of the positive implications of burgeoning trade between the two countries that only two years back were involved in clashes at the border at Galwan.

The bilateral trade balance attracted attention because it reflected large imports from China into India, many multiples of India’s exports to China. Over the first nine months of 2022, China’s exports to India rose more than 30 per cent to $89.7 billion while India’s exports to China fell 36 per cent to $13.97 billion. As a result of this almost one-way trade flow, the aggregate bilateral trade flow (imports plus exports) of $104 billion over those nine months resulted in a deficit in trade for India vis-à-vis China of $76 billion.

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