Trade between India and China reached a record $125 billion in 2021 despite the worst chill in bilateral ties in decades, Chinese customs data showed on Friday.
Two way trade between India and China in 2021 stood at $125.66 billion, up 43.3% from 2020 when bilateral trade was worth $87.6 billion.
In 2021, China’s exports to India were $97.52 billion, up 46.2%, while China imported $28.14 billion worth of goods from India, up 34.2%, according to statistics released by the General Administration of Customs (GAC) and quoted by the tabloid, Global Times, on Friday.
Trade deficit between the two countries remained much in favour of China – at $69 billion.
The deficit in trade has been a constant source of friction between New Delhi and Beijing, with India complaining that China, despite promises, hasn’t given Indian companies access to sectors like pharmaceuticals.
India was China’s 15th largest trade partner in 2021, according to GAC.
“Analysts attributed the surge in trade to the complementary aspects of the industrial chains of the two countries. For example, about 50-60 percent of chemicals and other materials used by the Indian pharmaceutical industry, which is a pillar industry, are imported from China,” the Global Times report said.
India-China trade in 2020 declined by 5.6% to $87.6 billion, the lowest since 2017. But China still overtook the US to become India’s largest trading partner last year.
Chinese companies saw an increase in demand from India for medical equipment in the first half of the year following a devastating second wave of the coronavirus pandemic.
The widening trade deficit with China, according to an explanatory note published online by the Indian embassy, can be attributed to two factors: narrow basket of commodities, mostly primary, for exporting to China and the lack of market access for most India’s agricultural products and the sectors where India is competitive in, such as pharmaceuticals, and IT.
The Chinese report said amid bilateral tensions, the trade data “is just another piece of proof that New Delhi is unable to reduce its dependence on the Chinese market”.
Indian and Chinese border troops have been locked in a border standoff in eastern Ladakh since May 2020, when a violent clash in Pangong lake area led to both sides gradually deploying tens of thousands of soldiers as well as heavy weaponry along the border.
Several rounds of military and diplomatic talks have only resulted in partial disengagement of troops until now.
Separately, GAC data showed on Friday that trade between China and the US soared by 28.7% and amounted to $755.6 billion in 2021 – maintaining a strong growth momentum and contributing 12% to China’s record $6 trillion foreign trade for the year.
China’s exports to the US increased by 27.5% in 2021, while imports grew by 32.7%, reaching $179.53 billion.
“The US maintained its place as China’s third-largest trade partner following Asean and the European Union. China-US trade was twice China’s trade with its fourth-largest trade partner Japan – which was 2.4 trillion yuan,” the Global Times reported.