Trade with India grew by over 70% in January-May 2021: China customs data

The figures were released by the General Administration of Customs (GAC) in China on June 7.

“If anything, these extraordinary growth rates show that China-India trade has largely shrugged off the impact of the political tensions caused by the border friction last year, bouncing back quickly,” the state media report said.

A large part of the increase in trade was due to the export of medical equipment from China to India as the latter sought to combat the devastating second wave of COVID-19. However, notwithstanding special trade circumstances, India still carries a large portion of a trade deficit in its economic ties with China.

In the financial year 2020-2021, the trade deficit was $44 billion in favour of China. This was a significant reduction of 30.15 percent from the $63 billion trade deficit in favour of China in 2017-18.

The Indian Embassy in Beijing explains that a large portion of the trade deficit is due to trade access for competitive industries and a small variety of goods that are actually able to be traded.

“The growth of trade deficit with China could be attributed to two factors: Narrow basket of commodities, mostly primary, that we export to China, and market access impediments for most of our agricultural products and the sectors where we are competitive, such as pharmaceuticals, IT/IteS, etc. Our predominant exports have consisted of cotton, copper and diamonds or natural gems,” the embassy explains on its website.