China Becomes India’s Largest Trade Partner
China has emerged as India's largest trading partner, replacing US in 2008-09. Apart from increasing trade engagement with the neighbouring country and weak demand for foreign goods in the US, which is reeling under recession contributed to this.
According to a reply filed by minister of state for commerce Jyotiraditya Scindia in Lok Sabha on Monday, bilateral trade engagement between India and China stood at Rs 1,63,202 crore (nearly $ 36 billion) in April to February 2008-09, an increase of nearly 7% over Rs 1,52,713 crore in the year ago period. In the same period under consideration, bilateral trade between India and the US dipped 7.5% and stood at Rs 1,55,353 crore (approximately $ 34 billion).
Exports from India had increased 3.4% in dollar terms and 17% in rupee terms during 2008-09.
Significantly, trade deficit-the difference between exports and imports-with China expanded 41% in the period under consideration and stood at Rs 92, 676 crore (nearly $20.3 billion), pointing towards fast expanding imports from China. This is nearly one fifth (18%) of India's trade deficit during the period under consideration, the highest for any of its trade partners.
According to data available with the commerce ministry, imports from China expanded 28% and stood at Rs 1,27,938 crore ($ 28.10 billion) in April to February period of 2008-09. In fact, increase in large number of chemical and metal items import from China has been of concern for India, which has initiated many anti-dumping and safeguard duty mechanism investigations to ascertain if Chinese suppliers are adopting any unfair trade practice.
Historically, the US has been India's top trading partner. Exports to the US have mostly been greater than imports, as a result of which India has enjoyed a trade surplus. However, hit by the economic recession, demand for goods in the US plummeted, impacting exports from India as well.
Posted by Truth About Trade & Technology