Business Update Growth in India’s trade with China slowed down during the Modi government TOU

Growth in India’s trade with China slowed down during the Modi government

Despite strained relations with China over the border invasion, India’s trade relations with the county continue to be upward. India has a long trade deficit with China, which means that India imports from China compared to exports to the Himalayas. According to Reports, Despite tensions in Ladakh and elsewhere, India-China trade reached a record $ 125 billion in 2021.

In this bilateral trade, India’s imports from China were valued at $ 97.52 billion, while China’s imports from India were valued at $ 28.14 billion, resulting in a trade deficit of $ 69.38 billion for the year 2021. According to the report, India’s imports from China have increased significantly to 46.2%. Increased imports of medical products and raw materials by the pharmaceutical industry due to Covid-19.

Given the Modi government’s Made in India pressure, the growing trade deficit with China is worrisome, not as bad as it seems. This is because, in recent years, there have been signs of a reduction in the overall trade deficit, and although trade with China has grown, it has grown at a similarly high rate with other countries.

Growth in imports from China has been minimal in recent years, compared to very high import growth during the UP regime. From 2003-04 to 2013-14, imports from China increased by 1,160% from $ 6.05 billion to $ 61.60 billion during the period. In comparison, imports increased by only 8% during 2014-15 to 2020-21. Imports from China were 60 60.41 billion in 2014-15 and 2020 65.21 billion in 2020-21.

In fact, while the trade deficit with China widened sharply during the UP regime from 2004 to 2014, the growth trend was caught during the NDA regime from 2014, and peaked in 2020 before rising last year. The trade deficit with China was $ 44 billion in 2020-21, down from $ 48 billion in 2014-15. Although it increased in 2021, as it was mainly fueled by increased imports of pharma products due to the epidemic, it is expected that it will not become a recurring phenomenon.

The trade deficit with China increased almost 24 times between 2004-05 and 2013-14, which was significantly controlled during the Modi government.

Another important point to note is that when India’s trade deficit with China came under control and the growth rate of imports came down, China’s share in the increase in India’s trade also declined.

During the January-November 2021 period, India’s trade with Australia increased by 102%, while for China it increased by only 44%. Trade with other countries like South Africa, Belgium, UAE, Thailand, USA, Indonesia, etc. has grown at a higher rate compared to China in the first 11 months of 2021.

The growth rate of India’s trade with China was even lower than the growth of India’s total international trade, which increased by 50% to over $ 290 billion.


This shows that as India has become a major trading partner globally, its trade with all other countries has grown significantly. And more importantly, trade with China has grown at a much higher rate than other countries.

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