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According to a Global Trade Research Initiative (GTRI) report, India's share of industrial goods imports from China has increased from 21% to 30% over the past 15 years, surpassing $101 billion in 2023–24 from approximately $70 billion in 2018–19. The report also predicted a sharp increase in Chinese imports in the upcoming years.
As per the GTRI study, over the last 15 years, China's goods imports have increased 2.3 times faster than India's total imports. China is the top supplier in eight major industrial sectors, including machinery, chemicals, pharmaceuticals, and textiles, contrary to popular belief that Chinese imports are only high in electronics.
In 2023-24, India's total merchandise imports amounted to $677.2 billion, with $101.8 billion coming from China. This means China accounted for 15% of India's total imports. Of these imports from China, $100 billion or 98.5% were in major industrial product categories.
The key sectors where New Delhi's dependence is rising significantly include electronics, telecom and electrical; machinery; chemicals and pharmaceuticals; products of iron, steel and br metal; plastics; textiles and clothing; automobiles; medical, leather, paper, glass, ships, aircraft and remaining categories.
From April to January 2023-24, the electronics, telecom, and electrical products sectors had the highest import value at $67.8 billion, with China contributing $26.1 billion. "This represents a substantial 38.4% of the total imports in this category, indicating a heavy dependence on Chinese electronic goods and components," it said. In the machinery sector, China accounts for $19 billion, which is 39.6% of India's imports in the sector. This underscores China's key role as a supplier of machinery to India.
"Overall, India imports a broad array of products from China, from high- to low-technology items, highlighting significant gaps in India's industrial capabilities across various sectors," it added. Chinese companies are involved in India's energy, telecommunications, and transportation sectors and play critical roles in smartphones, electronics, electric and passenger vehicles, solar energy, engineering projects, and many other sectors.
The report said that Indian firms have carried out imports so far, but with the entry of Chinese firms into the Indian market, India's industrial product imports are set to rise at an accelerated pace.
"As the Chinese firms operating in India will prefer sourcing most requirements from their parent firms, Indian imports will rise sharply. For example, in the next few years, every third electric vehicle (EV) and many passenger and commercial vehicles on Indian roads could be those made by Chinese firms in India alone or through joint ventures with Indian firms," the report said. It added that the large-scale entry of Chinese automakers into India will impact the domestic auto/EV manufacturers, firms working in the EV value chain space and battery development.
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