Prime Minister Narendra Modi’s self-reliant India plan seems to be successful on the business front. India’s trade deficit with China in the first five months of this financial year has half compared to the first five months of the previous financial year. The increase in India’s exports to China and the large decline in imports of Chinese goods into India are the main reasons behind the trade deficit with China halved. The government had taken major steps to stop the dumping of Chinese goods in the Indian market, which has shown its effect in the first five months of this financial year.
India’s trade deficit with China stood at $ 12.6 billion in the first five months of this financial year compared to $ 22.6 billion in the April to August last year. India’s trade deficit with China was $ 23.5 billion in the same period in 2019. After the self-reliant India campaign and violent clashes in the Galvan Valley, India is trying to reduce trade dependence on China. India’s exports to China have increased in these five months. Indian exports to China witnessed double-digit growth for four consecutive months. In addition, India’s iron and steel shipments related to exports in China increased by 8 times.
It grew by 27% in the first 5 months of this financial year compared to 9.5% overall shipments of April to August last year. In the first five months of this financial year, sugar imports have come down to 21 percent. The figure was 27% in the first five months of the last financial year. Overall export growth was 78 percent in June, down from 23 percent in July. After the skirmish with China in the Galvan Valley, the Indian government is also working on policies to prevent the dumping of Chinese goods in the country.
Currently, the Director-General of Foreign Trade has also announced a ban on the import of color television sets to promote local manufacturing in India. Apart from this, India also wants to stop the rerouting of Chinese goods in India by its South Asian trading partners. Chinese smartphones have dominated the Indian phone market for some time. However, in the first quarter of the financial year, the share of Chinese smartphones in the Indian market fell to 72 percent while in the last quarter of last year, the share of Chinese smartphones in India was 81 percent.
In addition, the government is considering imposing licensing requirements in 20 sectors in India. These 20 sectors include Toys, Sports, Goods, Textiles etc. Apart from this, the central government can increase the customs duty on active pharmaceutical ingredients (API) by 10 to 15%. Actually, the Indian pharmaceutical industry is dependent on China for APIs. China holds 68% of India’s active pharmaceutical ingredients (APIs) and 90% in antibiotics.
