Surge in India’s exports to China in Q1 2024 reflects growing economic integration
Published: Apr 14, 2024 07:27 PM
Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

India's exports to China in the first quarter of 2024 surged by 22.5 percent year-on-year, data from China's General Administration of Customs showed on Friday. In US dollar terms, China's trade with India increased 4.9 percent for the period.

Although some Western media outlets have been hyping up the so-called economic competition between the two Asian giant economies, the robustness of the bilateral trade reflects the resilience of the two economies and their cooperation in the fields of economy and trade.

The growth of India's exports to China can be attributed to two main factors. Firstly, India has rolled out various incentives, such as tax rebates, to incentivize domestic and foreign investment to boost economic growth and exports. India's export sector, notably electronics, has showcased impressive growth over recent months. 

According to media reports, India's overall merchandise exports in February, 2024 were estimated to be $41.40 billion, reporting positive growth of 11.86 percent on a year-on-year basis. India's exports in January this year grew by 3.13 percent.

China is one of India's largest trading partners, with significant exchanges in various commodities. In recent years, the idea that India could replace China has become a mainstream discussion in the West, making someone believe the competition between the two countries has intensified, but if people take a closer look at the global value chains, they will find India is not in the same industrial segments as China, and India's industrialization is still at a relatively early stage of development. 

There is indeed some level of competition between the Chinese and Indian economies, but cooperation far outweighs competition. At a time when India is stepping up efforts to boost exports, the surge in India's exports to China will help inject new impetus into the Indian economy.

Secondly, India's soaring exports to China are perhaps the result of China's increasing demand for raw materials as well as bulk commodities such as iron ore, which is a bulk exports item to China. As the world has entered a period of rising turbulence and the global economy is facing a grimmer outlook, China has successfully ensured both price stability and economic advancement, representing a huge potential market for Indian goods too. 

Economic and trade cooperation between China and India is both resilient and has great potential. It is hoped that India can take practical measures to maintain the sound development momentum of bilateral economic and trade cooperation.

However, data from the China Trade Remedies Information website indicates that in 2023, India initiated 22 trade remedy investigations against Chinese products, making the country the largest source of trade remedy measures against Chinese goods. It seems trade protectionism is rising as India looks to expand its domestic manufacturing sector, and the rise of protectionism is certain to disrupt the regional industrial chain, and undermine the atmosphere for economic cooperation. 

It is unwise for India to embrace trade protectionism at a time when its exports are experiencing positive growth. We hope that India can provide fair treatment to Chinese enterprises, show its support for free trade, and provide a sound basis for sustainable export growth. 

The author is a reporter with the Global Times.