India's Dependence on Chinese Imports is Increasing
Despite political crises, the trade deficit between the two countries has reached record levels, and dependence on critical products continues.
The trade deficit between India and China has grown to a record level of $112 billion, despite political and security crises.
Record Increase in Trade Deficit
India's trade deficit with China continued to grow even during a period when political and security ties were at their lowest ebb following the 2020 Galwan Valley clashes.
The trade deficit, which previously stood at $44 billion, has risen to $112 billion as of this year, and experts predict this deficit could further increase to $134 billion.
Dependence on China for Critical Products
China accounts for more than thirty percent of India's industrial imports, and the country remains directly dependent on China for over a hundred critical products.
In addition to final consumer goods, India continues to heavily rely on China for production inputs such as smartphone components, industrial machinery, battery inputs, chemicals, and solar cells.
Summit Talks and Search for Solutions
Meeting on the sidelines of the BRICS summit held in Delhi in September, Prime Minister Narendra Modi and Chinese President Xi Jinping committed to addressing structural trade imbalances and supply chain issues.
Despite some successes achieved in the toy sector, India faces major difficulties in reducing its import dependence on China for widespread industrial and manufacturing activities.