India’s “Print” April 1 article, originally titled: India has been reduced to a colony of China ?
Looking at India’s exports and imports, it seems that yes, India’s exports to China have increased over the past few years, and imports from China have decreased. But a closer look at trade items between the two countries reveals that bilateral trade remains unbalanced. Experts say that trade data for 2014-2015 to 2019-2020 show that exports of low-value raw materials and imports of high-value manufactured goods characterize India’s trade relationship with China, somewhat similar to India’s pre-independence relationship with colonial ruler Britain. This trade pattern means that India’s exports to China have accounted for only 1/5th of India’s imports from China over the past six years.
In the first six years to 2020, India’s average annual exports to China were about $13 billion, while India’s average annual imports from China were worth $66 billion. India’s exports (to China) include food products such as fish and spices, as well as primary products such as iron ore, granite and petroleum products, while imports from China are mainly electrical equipment and other mechanical appliances. Experts say this trade pattern is not likely to change significantly in the short term, and some of the changes that occurred this fiscal year due to the epidemic may be short-lived.
Ajay Sahai, Director General of the Federation of Indian Export Organizations, said the current trade pattern reflects the level of manufacturing in India. “This is related to the level of manufacturing in India. We import finished products from China to meet India’s domestic demand. For example, India has started a telecom revolution that requires large imports of telecom equipment and cell phones from China. China dominated the electronics hardware market, while Indian industry was still in its infancy”.
The famous historian, Bipan Chandra, has written that the free trade policy pursued by the British in India had led to a surplus of raw material exports from India, but the corresponding economic prospects did not improve. According to Professor Biswajit Dhar of the Centre for Economic Research and Planning, School of Social Sciences, Nehru University, New Delhi, “The pattern of trade between India and China is a colonial pattern of trade”.
He argues that “India’s limited manufacturing capacity is waning as Indian industry is unable to withstand Chinese competition. China, the world’s factory, needs raw materials and intermediate products to fuel its manufacturing sector. And India has became a supplier of these products”.