Even as the world has tried to grapple with the raging COVID pandemic, India has increased its trade drastically with several nations in the world in the last quarter of the financial year 2021-2022. From January 2022 to March 2022, India’s international trade increased by 50% in total as compared to the last quarter of 2021-2022.
According to official data, India’s international trade increased by 50% (+$340bn) on YoY basis for the Financial Year 2021-22.
The highest increase in International Trade seems to have been between Australia and India, where the trade in the last quarter increased by 67%. This was followed by Belgium (31%), UAE (24%), the USA (24%), Indonesia (19%), and China (18%).
It is interesting to note that while the total International trade increased by $340 billion, the trade with China specifically only saw a marginal increase in comparison. In the last quarter of 2021-2022, the trade between India and China saw an increase of $26 billion.
Given that the total increase in trade with China was 30% and the increase in the last quarter was only 18%, it can be safely argued that the increase in trade with China in the previous quarter was much higher. In fact, the data proves this theory. In all the other previous quarters, the percentage increase in trade between India and China was higher. In the past quarter, the increase has been the least.
In Q1 for example, the increase was 26.47%. In the third quarter, it was 33.41%. Therefore, in quarter 4, the percentage increase was minimum at 18%.
Interestingly, these facts were glossed over by the media while reporting on the increase in International trade.
The Hindu, for example, decided to run with the headline, “India’s Q1 imports lift trade with China to record high”.
The Hindu wrote, “The 15% increase in India-China trade was among the highest for China’s major trading partners. Overall, China’s exports climbed 13.4%, the General Administration of Customs (GAC) said, while imports rose 7.5%. Trade increased 9.9% with the U.S. and 10.2% with the EU”.
While writing that the trade increase was the highest as far as China is concerned, The Hindu failed to mention that the trade increase in this quarter was amongst the lower for India as far as percentage increase with other countries was concerned. It is also pertinent to note that The Hindu was replying on Chinese data and not data provided by India.
Growth in imports from China slowing down in Modi govt tenure
The growth in imports from China was minimal in recent years, compared to very high import growth during the UP regime. From 2003-04 to 2013-14, imports from China had increased by a whopping 1,160% which went up from $6.05 billion to $61.60 billion during this period. Compared to that, the imports have gone up by just 8% from 2014-15 to 2020-21. The imports from China in 2014-15 was $60.41 billion, and the same in 2020-21 was $65.21 billion.
In fact, while the trade deficit with China had gone up exponentially during the UPA rule from 2004 to 2014, the growth trend has been arrested during the NDA rule from 2014 and had come down in 2020 before going up last year. The trade deficit with China in 2020-21 was $44 billion, down from $48 billion in 2014-15. Although it went up in 2021, it was mainly fuelled by increased imports of pharma products due to the pandemic.
The trade deficit with China had gone up by almost 24 times from 2004-05 to 2013-14, which has been substantially controlled during the Modi govt.