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Posted 23 Apr 2024

2 min read

  • Status of India- China Trade
    • India's exports to China increased from $15.33 billion in FY23 to $16.67 billion in FY24.
      • Key items exported to China include iron ore, cotton yarn, cotton, quartz, etc.
    • India’s imports from China rose from $98.51 billion in FY23 to $101.75 billion in FY24, widening trade deficit by to $85.08 billion in FY 24 (i.e. 2.3%).
      • Key items imported from China include plastics, steel products, fertilizers etc.

 

  • Reasons for increasing Trade Deficit
    • Narrow basket of commodities, mainly raw material and minerals are exported, from India to China. 
    • Increased imports of material for solar energy, electric vehicles etc. due to focus on renewable energy and carbon neutrality.
    • Growth of manufacturing units in India has led to increased raw material imports from China.
    • Preference of firms in sourcing supplies from China due to less cost.

 

  • Measures taken by India 
    • Production-Linked Incentive scheme to make Indian manufacturers globally competitive, attract investment, promote exports.
    • Expanding India’s trade partners by signing and negotiating trade facilitation agreements with European Union, Canada etc.

 

  • Way ahead
    • Explore alternative sources of imports from the ASEAN countries.
    • Boosting India's domestic manufacturing base and exports.

 

  • Tags :
  • India- China Trade Deficit
  • Trade Deficit
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