INDIA CAN REDUCE TRADE DEFICIT WITH CHINA BY $8.4 BN

INDIA CAN REDUCE TRADE DEFICIT WITH CHINA BY $8.4 BN: STUDY

India can potentially reduce its trade deficit with China by $8.4 billion over FY21-22, Acuité Ratings & Research said in a study

Can be achieved by the rationalisation of just a quarter of India’s imports from that country in select sectors where India has well established manufacturing capabilities, Acuité said

Domestic manufacturing sector can substitute 25% of the total imports from specified sectors 

Nearly 40 subsectors of India had the potential to lower their import dependency on China

Sectors include chemicals, automotive components, bicycles parts, drug formulations, cosmetics, consumer electronics and leather-based goods

With an import of $65.1 billion and export of $16.6 billion, India recorded a trade deficit of $48.5 billion with China in FY20

Sino-Indo relations:Relationship has been cordial, there have been border disputes

China and India are separated by the Himalayas. Nepal and Bhutan acting as buffer states

Growth in diplomatic and economic influence has increased the significance of their bilateral relationship

India remains wary about China's strong strategic bilateral relations with Pakistan, while China has expressed concerns about Indian military and economic activities in the disputed South China Sea

India established diplomatic relations with the PRC on 1 April 1950, the first non-communist/socialist nation in Asia to do so

Founding of the Sino-Indian Friendship Association on 16 May 1952 in Beijing

April 1954, India and the PRC signed an eight-year agreement on Tibet that became the Five Principles of Peaceful Coexistence (or Panchsheel)

Border war between the People's Republic of China and India on 20 October 1962. It occupied strategic points in the Aksai Chin and Demchok regions of Ladakh

 

In late 1967, there were two more conflicts between Indian and Chinese forces at Sikkim. The first conflict was the "Nathu La Incident", and the other the "Cho La Incident"

August 1971, India signed its Treaty of Peace, Friendship, and Co-operation with the Soviet Union. The PRC sided with Pakistan in its December 1971 war with India

Sino-Indian relations hit a low point in 1998 following India's nuclear tests

In 2003, China officially recognised Indian sovereignty over Sikkim as the two countries moved towards resolving their border disputes

In 2005, China and India signed the 'Strategic and Cooperative Partnership for Peace and Prosperity'

In 2006, China and India re-opened Nathula pass for trading. Nathula was closed 44 years prior to 2006 

In 2019, India reiterated that it would not join China's Belt and Road Initiative

2017 Doklam standoff: A territory which is claimed by both China as well as India's ally Bhutan

On 10 May 2020, Chinese and Indian troops clashed in Nathu La, Sikkim. Following the skirmishes in Sikkim, tensions between the two countries grew in Ladakh

Following the Galwan Valley clash on 15 June 2020, there were renewed calls across India to boycott Chinese goods

 

China is India's largest trading partner

Commodities exported from India to China: Cotton Gems, precious metals, coins, Coppe, Ores, slag, ash, Organic chemicals, Salt, sulphur, stone, cement, Machines, engines, pumps, Plastics, Electronic equipment, Raw hides excluding furskins

Commodities exported from China to India: Electronic equipment, Machines, engines, pumps, Organic chemicals, Fertilizers, Iron and steel, Plastics, Iron or steel products, Gems, precious metals, coins, Ships, boats, Medical, technical equipment.