Despite border tensions, boycotts and bans, India-China trade grew to record $125 billion in 2021, India's trade deficit grew to over $69 billion

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Despite border tensions, boycotts and bans, India-China trade grew to record $125 billion in 2021, India's trade deficit grew to over $69 billion​

WION Web Team
NEW DELHI Published: Jan 14, 2022, 07:15 PM(IST)
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Two way trade between India and China in 2021 stood at $125.66 billion, up 43.3% from 2020 when bilateral trade was worth $87.6 billion Photograph:( WION )

Due to the lengthy standoff between the forces in eastern Ladakh, 2021 was a year in which India-China relations reached a new low. In the last 12 months, bilateral ties have seen their worst frost in decades.

Regardless of the disputes and military standoffs, bilateral trade between India and China reached a new high of over $125 billion in 2021, surpassing the $100 billion mark in a year, while India's trade deficit grew to over $69 billion.

Bilateral trade between India and China was valued at $125.66 billion in 2021, up 43.3 percent from $87.6 billion in 2020.

According to statistics provided by the General Administration of Customs (GAC) and quoted by the tabloid Global Times on Friday, China's exports to India in 2021 were $97.52 billion, up 46.2 percent, while China received $28.14 billion worth of commodities from India, up 34.2 percent.

The trade disparity between the two countries remained $69 billion in China's favour.

For more than a decade, India has expressed its alarm over China's rising trade deficit, urging Beijing to open its markets to Indian IT and pharmaceutical companies.

Due to the enormous second wave of COVID-19 and repeated bouts of the virus in India, observers say much of China's growth in exports to India this year can be ascribed to the import of medical supplies and raw materials for India's booming pharmaceutical industry.

The historic growth in bilateral trade, which surpassed USD 100 billion, went unnoticed as ties remained tense due to the protracted military standoff in eastern Ladakh.

The border standoff between India's and China's armies began on May 5 last year after a violent confrontation in the Pangong lake areas, and both sides have gradually increased their deployment by pouring in tens of thousands of soldiers and heavy weaponry.

The two parties concluded the disengagement process in the Gogra area in August and the north and south banks of the Pangong lake in February as a result of a series of military and diplomatic talks.

On January 12, the two sides met for the 14th round of Corps Commander-level discussions to end the standoff in the remaining territories, and they promised to meet again shortly.

Each side currently has around 50,000 to 60,000 troops along the Line of Actual Control (LAC) in the mountainous sector.

 
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Sino-India trade at record $125bn for 2021 amid border tension; deficit widens

WION Web Team

Two way trade between India and China in 2021 stood at $125.66 billion, up 43.3% from 2020 when bilateral trade was worth $87.6 billion

Published on Jan 14, 2022 06:48 PM IST
BySutirtho Patranobis

Trade between India and China reached a record $125 billion in 2021 despite the worst chill in bilateral ties in decades, Chinese customs data showed on Friday.

Two way trade between India and China in 2021 stood at $125.66 billion, up 43.3% from 2020 when bilateral trade was worth $87.6 billion.

In 2021, China’s exports to India were $97.52 billion, up 46.2%, while China imported $28.14 billion worth of goods from India, up 34.2%, according to statistics released by the General Administration of Customs (GAC) and quoted by the tabloid, Global Times, on Friday.

Trade deficit between the two countries remained much in favour of China – at $69 billion.

The deficit in trade has been a constant source of friction between New Delhi and Beijing, with India complaining that China, despite promises, hasn’t given Indian companies access to sectors like pharmaceuticals.
India was China’s 15th largest trade partner in 2021, according to GAC.

“Analysts attributed the surge in trade to the complementary aspects of the industrial chains of the two countries. For example, about 50-60 percent of chemicals and other materials used by the Indian pharmaceutical industry, which is a pillar industry, are imported from China,” the Global Times report said.

India-China trade in 2020 declined by 5.6% to $87.6 billion, the lowest since 2017. But China still overtook the US to become India’s largest trading partner last year.

Chinese companies saw an increase in demand from India for medical equipment in the first half of the year following a devastating second wave of the coronavirus pandemic.

The widening trade deficit with China, according to an explanatory note published online by the Indian embassy, can be attributed to two factors: narrow basket of commodities, mostly primary, for exporting to China and the lack of market access for most India’s agricultural products and the sectors where India is competitive in, such as pharmaceuticals, and IT.

The Chinese report said amid bilateral tensions, the trade data “is just another piece of proof that New Delhi is unable to reduce its dependence on the Chinese market”.

Indian and Chinese border troops have been locked in a border standoff in eastern Ladakh since May 2020, when a violent clash in Pangong lake area led to both sides gradually deploying tens of thousands of soldiers as well as heavy weaponry along the border.

Several rounds of military and diplomatic talks have only resulted in partial disengagement of troops until now.

Separately, GAC data showed on Friday that trade between China and the US soared by 28.7% and amounted to $755.6 billion in 2021 - maintaining a strong growth momentum and contributing 12% to China’s record $6 trillion foreign trade for the year.

China’s exports to the US increased by 27.5% in 2021, while imports grew by 32.7%, reaching $179.53 billion.

“The US maintained its place as China’s third-largest trade partner following Asean and the European Union. China-US trade was twice China’s trade with its fourth-largest trade partner Japan - which was 2.4 trillion yuan,” the Global Times reported.

 
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