India's Trade Deficit with China: A Decade in Review

Commerce and Industry Minister Piyush Goyal stated that while India's trade deficit with China remains high, its rate of increase has slowed significantly from 2014-15 to 2023-24 compared to the previous decade. Efforts to reduce import dependency have led to decreased imports in several sectors, including electronics and fertilisers.

The Commerce and Industry Minister Piyush Goyal revealed on Friday that India's trade deficit with China, although still significant, has grown at a slower pace from 2014-15 to 2023-24 as compared to the previous decade.

Goyal presented data in the Rajya Sabha showing that the trade deficit's annual growth rate reduced from 42.85 per cent during 2004-05 to 2013-14 to just 6.45 per cent in the past decade, signalling successful government measures. The minister highlighted that India's exports to China in 2023-24 stood at USD 16.65 billion, while imports reached USD 101.75 billion, leading to a trade deficit of over USD 85 billion.

Despite the deficit, China remains India's largest trading partner with two-way commerce hitting USD 118.4 billion in 2023-24. Principal imports from China include capital goods and raw materials essential for India's expanding sectors like electronics and pharmaceuticals. Notably, import dependency has decreased in sectors such as electronics and fertilisers, attributed to government initiatives.

(With inputs from agencies.)