SOURCE / GT VOICE
GT Voice: Plunging exports to China call on India to focus on cooperation
Published: May 09, 2022 11:29 PM Updated: May 09, 2022 11:24 PM
China India Photo:CFP
China India Photo:CFP

Chinese official data showed on Monday that China's imports from India plummeted in April, due in part to China's efforts to curb its worst COVID-19 outbreak since 2020 that dampened domestic demand. But, there is more to be concerned about other than the COVID-19 epidemic when it comes to China-India trade.

China's imports from India dropped 57 percent to $1.364 billion in April, from $3.166 billion in the same period last year, data released by the General Administration of Customs revealed on Monday. During the January-April period, China's imports from India fell by 36.2 percent year-on-year.

That is much slower than the growth rate in China's overall trade. China's imports grew 7.1 percent in the first four months of 2022 in dollar terms from a year earlier, and in April, the country's imports hit $222.5 billion, unchanged compared to a year ago. A sharp decline in India's exports to China means India lagged behind many other Chinese trading partners in terms of unlocking the potential of China's consumer market.

The decline is the result of multiple factors. We cannot simply attribute the drop to insufficient demand in China as the country fiercely combats a COVID-19 outbreaks. India's trade policy toward China is also to blame for the sharp decline.

Given its massive trade surplus with China, India has tried to pursue a more balanced trade with China. However, its old ways of cutting deficit are not working well and India may need to change its approach. The sharp decrease in exports lifted India's trade deficit with China to $7.9 billion in April, up 69.2 percent from $4.7 billion in the same period last year.

India needs to resolve its trade deficit issue with China in a coordinated and cooperative manner. The key to solving China-India trade deficit is addressing how best to boost India's exports.

India has always wanted to replace China to become the next manufacturing power, but that has gone nowhere, given its current industrial foundation. The reality is that only by strengthening manufacturing cooperation with China can India's manufacturing sector be more integrated into the global industrial chain.

India has been promoting FTA talks with several economies recently, including the UK, Canada and the EU. Its Comprehensive Economic Partnership Agreement with the United Arab Emirates, which was signed in February, has set a shortest record among bilateral trade negotiations, the Times of India reported.

India may wish to integrate into the global industrial chain through trade cooperation with developed countries, but it must be pointed out that it needs to accelerate its integration into the Asia-Pacific industrial chain, instead of resisting regional cooperation, if it wants to move up the global value chain.

That's because India has had close industrial links with Asia-Pacific economies, and accelerating economic dialogue and opening-up with Asia-Pacific countries will be more beneficial to India's economic development.

China is a regional trading partner that India should not neglect. The two sides should not allow tensions in certain areas to define or even affect the overall development of bilateral relations.

During a visit by Chinese State Counselor and Foreign Minister Wang Yi to India in March, both sides agreed to hold talks on deepening economic and trade cooperation. It is hoped that both sides can move in the same direction to expand mutually beneficial bilateral cooperation.