Indo-China trade at risk as border skirmishes intensify
India banned 118 more mostly Chinese apps, raising tensions after troops skirmished over a disputed Himalayan border site, raising doubts about the fate of the US$82 billion in annual trade volume, reported Reuters.
The latest apps include Tencent Holdings popular videogame PUBG. India imported $65.3 billion worth of goods from China in the fiscal year ended March 2020, and exported $16.6 billion, according to the country’s commerce ministry. Below are trade arrangements and financial deals in major industries and products between the two countries:
Pharmaceutical India sources around 70 per cent of its active pharmaceutical ingredients from China to supply its vast pharmaceutical industry that includes Sun Pharmaceutical Industries, Lupin and IPCA Labs.
India’s pharma imports from China were $2.68 billion in 2019-20.
India’s auto parts imports from China were $4.2 billion in 2019, including engine and transmission parts, according to data from the Auto Component Manufacturers＊ Association of India (ACMA).
New Delhi has asked auto companies to cut imports from China, but industry experts say India relies heavily on China for cheap auto parts and electronic components.
Maharashtra, home to financial capital Mumbai, in June stalled a proposal by China’s Great Wall Motor to invest nearly $500 million.
Great Wall Motor and SAIC (600104.SS) unit MG Motor have bet big on India with investment proposals which India needs to create jobs.
In April, India tightened rules for investments from neighbouring countries, including China, to prevent opportunistic takeovers after the Covid crisis but as somewhat usual these protectionist measures are somewhat short sighted and does more harm than good to India’s status as a trading power on the global stage.
Chinese firms’ existing and planned investments in India stand at more than $26 billion, research group Brookings said in March.
Chinese tech giants Tencent and Alibaba have fuelled growth of Indian digital payments firms Paytm, grocer BigBasket and ride-hailing giant Ola.
India’s steel exports more than doubled between April and July to hit their highest level in at least six years, boosted by a surge of Chinese buying.
India’s exports of iron and steel and related articles to China stood at $595.9 million, while Indian imports from China in 2019-2020 stood at $2.71 billion.
India in June imposed an anti-dumping duty on flat-rolled steel products that are plated or coated with alloy of aluminum and zinc originating in, or from countries including China.
Non Essential Items: The Indian government has been consulting with companies on tightening curbs on 1,173 non-essential products including toys, plastics, steel items, electronics and specific auto components, according to a trade body official.
India has also been planning to impose higher trade barriers and raise import duties on around 300 products from China and elsewhere and at the end of the day without alternatives, consumers will end up paying higher prices.