India’s trade deficit with China widened significantly in August 2024. According to the commerce ministry data, imports from China rose by 15.55% compared to the same month last year, reaching $10.8 billion. This increase comes despite ongoing tensions between the two countries.
Conversely, India’s exports to China witnessed a sharp decline of 22.44%, totaling only $1 billion in August. This decrease was observed across various product categories, impacting sectors like pharmaceuticals, textiles, and agricultural products. Experts attribute this decline to factors like the Red Sea crisis disrupting logistical operations and a slowdown in global demand.
The data reveals a concerning trend for India. The substantial increase in imports and decrease in exports create a wider trade deficit, highlighting India’s reliance on Chinese goods. This situation could potentially put pressure on the Indian rupee and limit India’s bargaining power in future trade negotiations with China. The article emphasizes the need for India to diversify its trade partnerships and focus on boosting domestic manufacturing capabilities to reduce dependence on Chinese imports.