Theme: Import Dependence in India-China Bilateral Trade

Speakers: Dr. Aravind Yelery (Senior Research Fellow At The Peking University; Visiting Faculty At Fudan University And Indian Institute Of Management, Shillong ) and Dr. Roger Liu (Chair. Department Of Social Sciences, Flame University And Associate Professor Of International Politics)

Opening and Closing Remarks: Rahul Karan Reddy, ORCA

India’s bilateral trade with China is often highlighted as a source of concern by the media, academics and other stakeholders in civil society. India’s trade relationship with China takes on greater significance in the context of military skirmishes along the LAC and a shifting balance of power in the Indo-Pacific. Despite calls for self-reliance and indigenisation, India’s imports from China have risen sharply after the Galwan clash, resulting in a trade deficit of 68 billion USD in 2021-22. The latest Chinese Customs data indicates that the trade deficit crossed the 100 billion USD mark in 2022. Additionally, India mainly exports low value-added raw materials to China and imports high-value added manufactured goods which is a troubling asymmetry in the nature of products traded. The trade relationship presents academics and analysts an opportunity to detail the sources of import dependence and explore the dynamics influencing imports from China. Additionally, the discrepancy in trade data released by Indian and Chinese sources is worth discussing as well.

The import dependence on China has massive implications for India’s export-oriented sectors. The risks of overreliance on imports from China in sectors like pharmaceuticals was revealed during the COVID-19 pandemic. The pandemic exposed the vulnerability of supply chains to disruptions in business activity in China. Driven partially by the need to mitigate such risks, the importance of self-reliance has been emphasised by the Indian government through initiatives like Make in India (MII) and Production-linked Incentive (PLI) that aim to reduce India’s dependence on China for key intermediary inputs. Discussing the progress and performance of such initiatives will inform future decisions on India’s trade relationship with China.

Watch the talk here

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