It is no secret that India’s dependence on Chinese imports has been increasing and this has led to near deindustralisation of Indian economy. Our industries suffered major losses and many of them had to be closed down. It’s significant that imports from China were hardly $4.05 billion in 2003-04; which increased to $51.1 billion by 2013-14, showing a growth of nearly 29 percent annually. With realization of this problem, the new government under Narendra Modi came up with an idea of ‘Make in India’ first and then a full-fledged ‘Aatmanirbhar Bharat’ since May 2020, during COVID-19 pandemic.
It is notable that the import of Chinese merchandise, which was doubling every two-and-a-half years, during UPA’s decade, went down to 5.4 percent in first six years of the Modi government, but increased after May 2020, though for other reasons.
Since May 2020, with the Modi government’s launch of Aatmanirbhar Bharat policy, it gave hope that we might be able to reduce our dependence on Chinese imports and bring the manufacturing sector back on track and avoid security, health and economic risks arising from dependence on Chinese products.
But, the recent reports about continued and increasing dependence on Chinese imports have raised an alarm not only about the efficacy of the Aatmanirbhar Bharat policy, but also about security and economic risks attached to Chinese imports. The Global Trade Research Initiative’s (GTRI’s) report has recently revealed that China and Hong Kong account for 56 percent of India’s total imports of electronics, telecom and other electrical products. Also, China has become India’s largest trade partner, where total bilateral trade with China has reached $118.4 billion in 2023-24, against $118.3 billion with USA. In this bilateral trade, share of Chinese imports is $101 billion, whereas exports are merely $16-17 billion. Though this figure of imports looks staggering, we see that during NDA regime the rate of growth of Chinese imports has been only 7.0 percent per annum, against growth of 29 percent during UPA regime.
The GTRI report says that 15 years ago China accounted for 21 percent of our merchandise imports, and now in 2023-24, China’s share in merchandise imports has increased to 30 percent. Our dependence on China has not been limited to electronics, telecom and electrical, it has spread to eight key industrial sectors which include machinery, chemical and pharmaceuticals, steel and base metals plastic and articles, textile and clothing and automobile sector also.
