Friday, 12 Sep, 2025
By: Anshul Vipat
Despite the clamour to boycott Made in China goods and efforts to restrict imports, imports from China have grown astronomically
Even before the Galwan incident in Ladakh in June 2020, many analysts and strategic experts were expressing concern over India’s over dependence on imports from China. The border clash of June 20 when the Indian armed forces lost about 20 soldiers, apart from an unspecified number of Chinese troops, left a bitter aftertaste and convinced many Indians that China could possibly never be a friend of India. In fact, many were convinced it had become a predatory and hostile adversary.
There was a clamour to boycott and ban Made in China goods and even the government took steps to send a message to China that trade and conflict could not grow together. But the reality on the ground is quite different. Imports from China remain high, and keep rising at a rate that doesn’t look sustainable. The largest component of India’s oil import bill in 2021-22 was oil. Gas at about $ 119 billion. That was followed by imports from China at about $ 95 billion. This resulted in India starting at a trade deficit of about $ 65 billion with China. Strategic experts were of the opinion that Indian imports were financing China’s efforts to use its military muscle against the country. But despite the clamour to boycott Made in China goods and efforts to restrict imports, imports from China have grown astronomically.
As the accompanying chart shows, there was a slowdown in momentum in growth of Chinese imports for a few years, particularly between the years 2018-19 to 2020-21. Imports from China actually declined. But it was not because of any successful campaign Made in China goods. The real reason was a rapid slowdown in GDP growth of the Indian economy, along with the havoc caused by the Covid pandemic. The moment GDP growth recovered and India became the fastest growing economy in the world, imports from China stated zooming again. For instance, imports from China in 2020-21 were valued at $ 65.5 billion. That was when the GDP actually declined by 7.7%. By 2021-22, when GDP growth rate almost touched 9%, imports from China shot up to $ 94.2 billion. Most of the imports were accounted for by mobile phones, components of mobile phones and for other telecom equipment, chemicals and APIs for the pharmaceutical industry. All are critical growth engines for the Indian economy. Worse, the Covid pandemic has shown that depending on China for the domestic pharma sector could be a vey dangerous idea.
The government says it is taking steps to reduce this unhealthy dependence on imports from China. But there are no signs of a slowdown. Imports from China touched about $ 8 billion in April, 2022, the latest month for which reliable data is available. Strategists are as worried about this as the military standoff in Ladakh.
