BOFIT Viikkokatsaus / BOFIT Weekly Review 2024/24

The value of China’s 2023 goods exports to India was about $118 billion, a level on par with the previous year. China’s goods imports from India last year were valued at roughly $19 billion, an increase of 6 %. India last year accounted for about 3 % of China’s total exports and less than 1 % of total imports. In contrast, China is India’s most important trading partner. China last year accounted for 18 % of India’s goods imports and 8 % of its goods exports. In 2023, China was India’s most important supplier of imports and fourth-most-important export destination.

For the January-April period, China’s goods exports to India fell by about 2 % y-o-y. China’s imports from India, however, grew by 15 % y-o-y. China showed a roughly $30 billion trade surplus with India in the first four months of this year.

Electronics and industrial commodities were the main categories of China-India goods trade last year. About half of China’s goods exports to India consisted of machinery & equipment, with chemical products and metals the next largest categories. The most important product group in China’s imports from India were mineral products, foodstuffs and chemicals.

Competitive struggles and policy rifts characterise economic relations between China and India. While the Chinese economy is about five times larger than the Indian economy, the Indian economy is growing faster. India needs to sustain its high growth in the coming decades if it is to catch up with China.

India’s inspections and restrictions on Chinese activities have increased. Like many other countries, India has imposed anti-dumping tariffs on Chinese goods to protect its domestic producers. India also froze over $600 million in assets of Chinese smartphone giant Xiaomi and banned the use of hundreds of Chinese applications in its territory. India recently rejected an investment offer from the Chinese electrical car manufacturer BYD, causing the company to scrub its billion-dollar investment plans.

India is unhappy with China’s increased regional presence, including plans for Belt and Road Initiative projects. India-China relations have been inflamed by territorial disputes following a series of clashes in 2020 along the Sino-Indian border. Despite a number of attempts at resolving border tensions, neither China nor India has yet to compromise on their demands.

Chinese exports to India, 2013-2023
Sources: CEIC and BOFIT.

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