Friday, 17 May, 2024
By: Anshul Vipat
China’s exports to India increased by 31 percent to US $89.6 billion in the first nine months of this year. Image Source: IANS
India's data showed exports to China in 2022 were worth $12 billion while China's data for the same corresponding time showed exports of $13.97 billion to India
India's trade with China continues to breach new records despite the Modi government's attempts to reduce the nation's dependence on goods manufactured in China. As per trade data issued by China's General Administration of Customs, China’s exports to India increased by 31 percent to US $89.6 billion in the first nine months of this year, compared to the same period in 2021. On the other hand, Indian exports to China – its largest trading partner, according to Beijing – declined by 36.4 per cent in the same period, falling to US$13.9 billion between January and September.
*2022 figures are calculated from Jan 2022 to Sept 2022
However, the data doesn't match when compared to the data furnished from Indian Ministry of Conmerce. According to the Ministry of Conmerce, the imports from China during the first nine months of 2022 was $79.16 billion, a gap of $10 billion.
Similarly, a gap of $2 billion was noted in the data on exports from India. India's data showed exports to China in 2022 were worth $12 billion while China's data for the same corresponding time showed exports of $13.97 billion to India..
Vastly varying trade data from India and China have left experts searching for clues to explain the mismatch. Under-invoicing of shipments by Indian importers is believed to be the main reason behind the gap in figures. Underreporting is often done to evade taxes.
Speaking to Mint, Biswajit Dhar, a professor at the Jawaharlal Nehru University said, "To reap maximum benefits, traders manipulate the values on invoices submitted to the customs authorities to avoid tariffs that should be levied. Empirical studies also show that when the tariffs are high, firms tend to under-report imports".
However, the ministry has refuted the claim. Speaking to the portal, "India is a sovereign country and our numbers are quite solid, based on data collected from various sources, including ports. We cannot comment on how other countries gather their data, particularly countries that are very opaque. India abides by international norms and UN conventions for maintaining robust data."
The ever increasing trade deficit is a worrying sign
The trade deficit between the two countries, according to China was $75.67 billion. According to India, it was $67.17 billion, bringing the difference to over $8 billion. The trade deficit at the half-year mark, according to India's figure stood at USD 47.94 billion.
India-China trade is on track to surpass USD 100 billion for the second straight year. Electrical and electronic goods account for roughly 50 percent of our total imports from Beijing. Other main driver of imports include machinery, active pharmaceutical ingredients, auto components and fertilizers. India has also imported large quantities of medical supplies during the pandemic. India’s major exports to China include ores, slag and ash, cotton, organic chemicals, mineral fuels/oils, copper and its articles.
Trade between the two neighbours had declined in 2020 on account of the pandemic but is now significantly up pre-pandemic levels. In 2021-22, India-China bilateral trade hit a record high of over USD 125 billion despite standoff by the militaries in Eastern Ladakh and boycott calls in domestic markets. China's exports to India last year went up by 46.2 per cent to USD 97.52 billion while India's exports to China grew by 34.2 per cent to USD 28.14 billion. The trade deficit stood at USD 69.38 billion in 2021.
India’s trade deficit with China has increased more than two-fold (219%) from $16 billion in 2007-08 to $51 billion in 2016-17. New Delhi managed to reduce the deficit by 48 percent in 2019-20. One of the primary reasons for such a huge deficit is due the fact that Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors like telecom and power, while India’s exports to China are characterized by primary and intermediate products.
The above figures are in sharp contrast to growing anger among Indians towards his eastern neighbour. In August, C Voter-India Tracker had conducted a survey where a whopping 90 percent of the respondents said India should adopt a more aggressive stand towards China while a mere 10 percent said New Delhi should tone down its aggression with Beijing. Indians across age, gender, educational, income, religious and ethnic backgrounds backed India's aggressive stand against China.
