India’s trade deficit with China fell to $48.66 billion in 2019-20 on account of the decline in imports from the neighbouring country, according to government data.
Exports to China in the last financial year stood at $16.6 billion, while imports aggregated at $65.26 billion, the data showed. The trade deficit stood at $53.56 billion in 2018-19 and $63 billion in 2017-18.
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The main imports from China include clocks and watches, musical instruments, toys, sports goods, furniture, mattresses, plastics, electrical machinery, electronic equipment, chemicals, iron and steel items, fertilisers, mineral fuel and metals.
India has time and again raised concerns over the widening trade deficit with China. The government is framing technical regulations and quality norms for several products to reduce dependence on Chinese imports.
It has also imposed anti-dumping duties on several goods, which are being dumped in the domestic market at below the average prices from China with a view to guarding domestic players from cheap imports. As many as 371 products have been identified for technical regulations. Of these, technical regulations have been formulated for 150 products worth $47 billion of imports.
Over 50 quality control orders (QCOs) and other technical regulations have been notified in the past one year, including those on electronic goods, toys, air conditioners, bicycle parts, chemicals, safety glass, pressure cooker and steel and electrical items. China accounts for about 14% of India’s imports and is a major supplier for sectors like mobile phones, telecom, power, plastic toys, and critical pharma ingredients.
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Foreign Direct Investment (FDI) from China in India has dipped to $163.78 million in 2019-20 from $229 million in the previous fiscal, according to the data. India had received $350.22 million in FDI from the neighbouring country in 2017-18 and $277.25 million in 2016-17.
During the period from April 2000 to March 2020, India attracted FDI worth $2.38 billion from China.
In April, the government tightened FDI norms coming from the countries which share land border with India. As per the amended FDI policy, a company or an individual from a country that shares land border with India can invest in any sector only after getting government approval.
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Top sectors which saw maximum FDI from China during April 2000-March 2020 are automobile ($987.35 million), metallurgical ($199.28 million), electrical equipment ($185.33 million), services ($170.18 million), and electronics ($151.56 million).