New Delhi, June 09:
Trade between India and China soared by around 70%year-on-year to at least $48 billion in the first five months of 2021, latest data from Chinese customs showed Monday.
Publicly available data from India too showed a healthy growth, although the numbers differed from those put out by Chinese state media. According to the Indian data, trade grew 55.83% in the first five months of the year.
The reason for the discrepancy in the data isn’t known; both countries denominate the trade in dollars.
Calling it a “spectacular growth”, Chinese state media interpreted the increase in bilateral trade as a sign of resilience in trade ties between the two countries despite serious conflict at the border and political differences.
“Trade between China and India soared 70.1 % in US dollar terms in the first five months of this year to $48.16 billion, according to Chinese customs data released on Monday. Specifically, Chinese exports to India grew 64.1% year-on-year from January to May, while imports surged 90.2%,” the nationalistic tabloid, Global Times reported.
According to the Indian data, imports from China rose 59.13% to $33.49 billion, while exports to China rose 46.09% to $10.41 billion.
The trade volume between China and India was higher than the trade that China conducted with other trading partners in this period, the Global Times report said.
The latest statistics were released by China’s General Administration of Customs (GAC) on Monday.
As per Chinese data, the rise in trade – or specifically Chinese exports to India – rose sharply between April and May. The rise could be attributed to the increase of exports of Chinese medical goods and equipment by Indian companies to fight the surge in Covid-19 cases in the last couple of months.
“If anything, these extraordinary growth rates show that China-India trade has largely shrugged off the impact of the political tensions caused by the border friction last year, bouncing back quickly,” the state media report said.
India-China trade in 2020 declined by 9.1% to $77.66 billion, though China still overtook the US to become India’s largest trading partner in 2020.
Those numbers are for the calendar year. India, follows an April to March financial year and according to government data, Indian exports to China saw a 27.53% jump in 2020-21 , while China’s imports saw a 0.07% contraction. Total India-China trade in the financial year was $86.4 billion, with a $44 billion trade balance in favour of China, a significant 30.15% drop from about $63 billion in 2017-18.
According to the Indian embassy in Beijing, though bilateral trade between the two countries grew exponentially overall – notwithstanding a fall last year because of the Covid-19 pandemic — India continues to be saddled with a big trade deficit.
“The growth of trade deficit with China can be attributed to two factors: narrow basket of commodities, mostly primary, that we export to China and market access impediments for most of our agricultural products and the sectors where we are competitive in, such as pharmaceuticals, IT/IteS, etc. Our pre-dominant exports have consisted of cotton, copper and diamonds/ natural gems,” the Indian embassy says on its website under the section “India-China Trade and Economic Relations”.
India’s Commerce ministry did not respond to an email query on this matter.
According to an Indian official who asked not to be named, the spurt in trade in 2020-21 signified a jump in Indian exports to China and a sharp decline in Chinese imports. “This is a grand success of Make in India and Make for the world aided by competitiveness of Indian industry,” the official said requesting anonymity.
To be sure, some analysts also point to the contraction of the Indian economy as the main reason for the fall in Chinese imports last year, although some bit of it was also on account of the situation at the Line of Actual Control.
As for the first five months of this year, people familiar with developments said on condition of anonymity that the numbers likely reflect the spike in imports of medical equipment from China to cope with the second wave of Coronavirus infections. The people, however, added that this shouldn’t be perceived as “business as usual” against the backdrop of the dragging border standoff.
In a phone conversation with his Chinese counterpart Wang Yi on April 30, external affairs minister S Jaishankar highlighted the importance of transport corridors and cargo flights remaining open and speedy logistics support from the Chinese side to facilitate the procurement of Covid-19 related products and raw materials.
The Indian side has repeatedly said in recent months that complete disengagement at all friction points on the Line of Actual Control (LAC) and peace and tranquillity in the border areas alone can lead to normalisation of ties in other spheres such as trade and investment.
Rezaul H Laskar in New Delhi contributed to this story