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India-China trade improving in favour of India: study

NEW DELHI, Jan 13:
India has seen a major breakthrough in its exports to China during last few months whereas the surge in imports for Chinese products in Indian market is on deceleration.
According to a recent study by PHD Research Bureau, PHD Chamber of Commerce and Industry “India – China Trade Relationship: The Trade Giants of Past, Present and Future”, exports to China are expected to improve further in the coming months.
Despite substantial volume of imports from China, of lately, India’s import growth from China shrunk from 65 per cent to 4 per cent during April – October 2017 whereas exports growth to China witnessed a surge from 40 per cent to 72 per cent during the same period.
With industrialization gaining pace, India’s import pattern with China has shifted dramatically from intermediate goods to capital goods. India’s import share of capital goods from China jumped from 47 per cent in 2011 to 57 per cent in 2016 whereas share of intermediate goods fell from 37 per cent to 29 per cent during the same period.
The study said that over the past decade, China has been able to enhance its footprint in India to a greater extent. However, the trend has seen a consistent reversal in the first half of 2017-18.
On the diversification front, China’s basket of exports to India is highly concentrated towards fewer selected products. This enhances the situation of high volatility for China due to higher reliance on fewer products in the coming times.
According to the study report by PHD Chamber, India’s trade deficit with China has also eased from 4.92 billion dollar in April 2017 to 4.6 billion dollar in October 2017.
China overtook UAE to become India’s biggest trading partner in 2013. Presently, China is India’s 4th biggest export destination whereas the biggest import source.
The trade between India and China witnessed a tremendous jump from 2.71 billion dollar in 2001 to around 70 billion in 2016. Commenting on the recent development in trade with China, Anil Khaitan, President, PHD Chamber of Commerce and Industry said that India’s exports to China grew by 72 per cent in October 2017 whereas growth of imports from China was only 4.2 per cent.
According to Mr Khaitan, India’s top ten imports from China comprise of 79 per cent of the overall imports from China.
The majority of the share is held by Electrical equipments (HS-85) at 34.5 per cent, followed by Mechanical appliances (17.7 per cent) and Organic Chemicals (9.2 per cent) among others. Conversely, India’s top ten export items to China comprise of 73 per cent of the overall exports to China.
Interestingly, the intra-industry trade relationship between India and China has expanded consistently over the years. Around 53 per cent of the trade between India and China is in the form of intra-industry, or similar products. This share has increase from 28 per cent in 2007 to 53 per cent in 2016.
The overall tariff structure for products from India attracted comparatively higher tariffs from China. The simple average tariff on products such as Tobacco registered highest rates of 29.25 per cent; followed by sugar and sugar products (25.17 per cent); cereals (21.75 per cent); edible preparations (20.7 per cent) among others, he added.
India is one of the biggest manufacturers of generic pharma products. However, we are unable to export to China because of China’s stringent protectionist policies, said Mr Khaitan. While Indian pharma companies are able to export their generic drugs to USA and EU, it is quite surprising that exports of generic pharma products to China are in a lackluster trajectory. (UNI)

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