Trade between India and China encompasses the exchange of goods between these two nations. This involves India importing products from China while exporting its own goods to China. The trade relations significantly influence the economic conditions of both countries.
India's imports from China are on the rise, with reports indicating that in the first ten months of the financial year 2024-25 (April 2024 to January 2025), India purchased goods worth $95.01 billion from China. This represents a 10.6% increase compared to the same period last year. Analysts predict that by the end of the financial year, imports may surpass $101.73 billion, establishing a new record.
India's substantial imports from China can be attributed to several factors. Chinese products are generally more affordable and readily available. Key imports include:
In contrast, India exports fewer goods to China. Major exports include:
A trade deficit occurs when a country imports more than it exports. As India imports significantly more from China than it exports, the trade deficit is increasing. In the first ten months of 2024-25, the trade deficit reached $83.52 billion, nearing last year's total of $85.06 billion.
India's exports to China have seen a decline of 14.85% in 2024-25 versus the previous year. This downturn is primarily due to reduced Chinese demand for iron ore, petroleum products, and other materials. In January 2025, India’s exports dropped by over 31% year-on-year.
The valuation of the Indian rupee plays a crucial role in trade dynamics. When the rupee depreciates against the dollar, Indian firms face higher import costs, particularly for petroleum, which is predominantly priced in dollars. This situation exacerbates India's trade deficit.
Trade relations are crucial for shaping economies; however, self-reliance is essential for a nation's strength.
Q1. What are the main products India imports from China?
Answer: India primarily imports electronic components, machinery, chemicals, and raw materials from China, which are essential for various industries.
Q2. How has India's trade deficit with China changed recently?
Answer: India's trade deficit with China has been growing, reaching $83.52 billion in the first ten months of 2024-25, close to last year's total.
Q3. Why are India's exports to China declining?
Answer: India's exports to China have dropped due to reduced Chinese demand for key products like iron ore and petroleum, resulting in a significant decrease in export value.
Q4. How does the rupee's value impact imports?
Answer: A weaker rupee increases import costs, especially for petroleum, as most of India's oil purchases are dollar-denominated, worsening the trade deficit.
Q5. What measures is India taking regarding imports from China?
Answer: India is focusing on promoting domestic manufacturing to reduce reliance on Chinese imports and mitigate the growing trade deficit.
Question 1: What was the trade deficit between India and China in the first ten months of 2024-25?
A) $95.01 billion
B) $83.52 billion
C) $101.73 billion
D) $85.06 billion
Correct Answer: B
Question 2: Which product is a major export from India to China?
A) Electronics
B) Iron ore
C) Telecom equipment
D) Industrial machinery
Correct Answer: B
Question 3: What has caused a decrease in India's exports to China in 2024-25?
A) Increased demand for iron ore
B) Reduced Chinese demand
C) Higher export prices
D) Improved trade relations
Correct Answer: B
Question 4: How does a weaker rupee affect India's trade?
A) Decreases import costs
B) Increases trade surplus
C) Raises import costs
D) Stabilizes foreign exchange reserves
Correct Answer: C
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