Items Exported To China From India

The relationship between the two Asian powers, as well as the rest of the world, has been rapidly evolving. Over the years, both countries have experienced their fair share of ups and downs. India and China are presently Asia's two largest and most dynamic economies, and they are emerging as new international trendsetters. India and China have had a long history of bilateral relations dating back to the mid-1980s. In the last decade, bilateral commerce between India and China has increased fourfold. However, the trade balance was skewed in China's favour. India's trade balance with China was negative. 

While China continues to have a hugely favorable trade balance with most of the smaller South Asian states, it is only the India-China trade that has remained China's most balanced trade in the region. Both of these countries, on the other hand, are rapidly growing and have the world's largest trained workforce, which they can use to boost the global economy into the future. In this article, we will discuss a list of items exported to China from India.

What Products Does China Buy From India?

While most of us are aware of the commodities China exports to the United States, many are unaware that India is also a major supplier to China. India earns more than $14 billion a year from exporting commodities to China, making it an important market for Indian goods. India's exports to China account for 5.3 percent of the country's total exports. The following are is the list of items exported to China from India:

• Durable goods for consumers

• Mineral and petroleum-based fuels

• Marine Foods ( the most popular product among the list of food items exported to China from India)

• Copper and copper alloys that have been refined

• Cotton yarn with a content of more than 85% cotton

• Grain and tobacco are examples of agricultural products.

• Carded but not combed Cotton

• Human and animal hair, as well as textile materials for wigs.

• Petroleum oils, cyclic terpene derivatives, and cyclic alcohols are all examples of                   cyclic alcohols.

• Oils are derived from bituminous materials, with the exception of crude Aluminum oxide and hydroxide.

• Granite, sandstone, basalt, and porphyry are common building stones.

• Corundum made in a lab

• Ores and concentrations of iron

• Jojoba oil and other vegetable fats and oils

• Iron pyrites that have been roasted

Among the list of items exported to China from India, India's top 10 export items to China account for 73 percent of the country's total exports.

Over the last decade, India's exports to China have changed from raw materials to intermediate commodities, depending on the level of processing. In 2006, raw materials accounted for around 60% of all exports to China. However, the share of raw materials declined to 25% in 2016, more than offsetting the rise in the share of intermediate goods from 34.5 per cent in 2006 to 50 percent in 2016. In contrast, India's industrial export share to China declined from 95 per cent to 84 percent between 2001 and 2016. The decrease in market share was offset by an increase in the market share of petroleum and agricultural products. During the period 2001-16, India's share of petroleum exports to China increased by 7 percentage points.

What Products Does China Export to the United States?

While we've been focusing on the list of items exported to China from India, let's take a look at what India imports from them. For over 2000 years, India and China have had commercial connections, trading a variety of essential goods and products. India has been increasingly reliant on China for products such as organic chemicals, mobile phones, household goods, and nuclear reactors in recent years. According to data from the Department of Commerce, China accounts for about 14% of India's total imports, totalling $62.3 billion. The following are the main products that China exports to India:

• Products derived from milk

• Components and products for electronics

• Lightings

• Chemicals made up of organic compounds

• Cellular phones

• Reactors and other nuclear machinery

• Fertilisers

• Components for computers

• Toys

• Automobile components

Due to the high cost of manufacturing solar modules and cells in India, Chinese companies supply roughly 80% of the country's solar modules and cells. The telecom industry is another major benefactor of Chinese imports, with Airtel and Idea 4G networks relying on ZTE and Huawei equipment. Several critical components are imported from China by industries that make refrigerators, mobile phones, and automobiles. Furthermore, China provides more than 70% of the drug intermediaries utilized in pharmaceutical manufactures in India. While India has a $16 billion trade surplus with the United States, it has a ＄53 billion trade deficit with China in the evaluation year 2018-19.

Bilateral Trade

In recent years, the bilateral relationship between India and China has been marked by historical animosities and boundary conflicts. Nonetheless, since the early 2000s, economic links have increased and have been at the forefront of this partnership, which has triggered the growth of the list of products exported to China as trade. This otherwise tense relationship has been bolstered through trade and investment.

Bilateral trade has increased from the US ＄3 billion in 2000 to the US $92.68 billion in 2019. In 2019, China was India's second-biggest commercial partner, but in the first half of FY 20-21, it overtook the United States as the country's top trading partner. In 2020-21, bilateral trade decreased by only 15%, compared to a 32.46 percent drop in worldwide trade. In 2019, China accounted for 5% of India's exports and 14% of the country's imports.

As a result, the trade imbalance in 2019 was extremely high, totaling the US $56.77 billion. Bilateral talks have been attempted to lessen the India-China trade deficit. For example, at an informal bilateral summit at Mahabalipuram, the issue was highlighted, and both sides agreed to establish a new high-level economic and trade dialogue mechanism to address it. China surpassed the United Arab Emirates as India's largest commercial partner in 2013.

China is India's fourth-largest export destination, but it is also the country's greatest source of imports. India and China's trade figures increased dramatically from USD 2.71 billion in 2001 to nearly 70 billion in 2016. Importantly, China continued to benefit from the majority of trade, as it exported ＄60.48 billion and imported ＄9 billion in 2016. During 2016, China's share of total trade with India was roughly 11%.

Effect of the Galwan Valley Incident

In addition, efforts have been made to lessen India's reliance on Chinese imports. For example, the Indian Railways abandoned a transaction of INR 471 crore with a Chinese company. Similarly, BSNL, the state-owned telecom company, was told not to utilise Huawei equipment for a network upgrade. In an effort to identify Chinese-origin items, the government has mandated that all products on the Government e-Marketplace include a Country of Origin tag. The Ministry of Power blocked imports of power supply systems and networks from China in early July 2020, citing cyber and security dangers, which account for around 30% of total imports from China.

Did You know?

While talking about the list of food items exported to China from India, it is important to mention that it is a common misconception that Chinese goods are inexpensive, but this is not the case. This is partially correct. About 30% of the products from China are heavily discounted, while the rest are priced according to market conditions.

To further understand, let's look at an example. At the cost of Rs 500, India buys 100 pens from China and 50 pens from the rest of the globe. A pen from China costs Rs 5, and a pen from the rest of the world costs Rs 10. (RoW). This reduces the price of Chinese pens by 50%. We used this logic to compare the average unit value of products imported from China to those imported from the rest of the world. We've compiled a list of a few key products that are available at significant discounts in India.