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Source: The post is based on the article “India’s trade deficit with China races beyond $100 bn” published in The Hindu on 13th January 2023.
What is the News?
India’s trade deficit with China has crossed $100 billion for the first time in 2022.
What is Trade Deficit?
About Trade Deficit between India and China
Trade deficit for India stood at $101.02 billion, crossing the 2021 figure of $69.38 billion.
China’s exports to India rose 21.7% on a year-on-year (YoY) basis to $118.5 billion. During 2022, China’s imports from India fell to $17.48 billion.
Why is the trade deficit with China growing?
The growth of the trade deficit with China could be attributed to two factors: 1) A narrow basket of commodities mostly primary, that India export to China and 2) Market access impediments for most of India’s agri products and the sectors where India is competitive such as pharma, IT/ITES.
Why are India’s imports from China rising?
According to experts, a large part of the import growth is being driven by the rise in chemicals and engineering equipment including electrical & non-electrical instruments. This reflects rising demand from a reviving manufacturing sector in India.