The China challenge: Fix India’s lopsided bilateral trade
Having displaced the US, China is back in the top spot as India’s biggest trade partner, with bilateral trade hitting $118.4 billion in fiscal 2023-24, according to Global Trade Research Initiative data. This was made up of $101.7 billion in imports by India, up 3.2%, and $16.7 billion in Indian exports, up 8.7%.
The sharp difference is evidence of India’s heavy reliance on Chinese goods despite efforts at reduction. Production-linked incentives have raised local manufacturing in some categories, but a greater weaning away from China would need a gargantuan expansion of factory output in India.
A decoupling may not be possible beyond a point, given how cheaply Chinese factories churn out so many products we need. Free-trade advocates argue that it’s useful to import from China what it’s better at making.
But we also need to boost exports to China, as the trade traffic right now is too lopsided. While our economy only needs to maintain a broad external balance, geopolitical complexities have made many countries worry about supply risks.
Read more on livemint.com
