All-Time High Trade With China

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Nov. 15, 2021

India’s trade with China (Merchandise, Imports + Exports) reached an all-time high of almost US$10bn in September this year. This is 25% growth over September-2020. From the Pandemic lows of April last year, India’s trade with China has more than doubled. At the current run rate, China accounts for ~10% of India’s merchandise trade.

Imports from China are currently growing far faster than exports to China. Thus, in the September quarter, for instance, Imports grew 33% YoY while Exports grew just 8% YoY. Consequently, while imports from China are at an all-time high, exports are ~20% below their peak.

Also worth noting is the sharp sequential deceleration in exports in the last few months, even as India’s overall exports have increased. India’s exports to China have declined 20% QoQ during the September quarter even as India’s overall exports rose 10% QoQ during the September quarter.

India’s Imports from China are a lot more concentrated than Exports. The top 5 import items contribute to ~70% of total imports from China. Machinery and Appliances are by far the two biggest items of imports from China. Both categories have seen strong growth in imports this year – relative to both 2020 as well as 2019. And given that a large part of imports of these items is for end consumption, this is suggestive of reasonably strong overall consumption demand in India. Organic chemicals is the other large import item from China and it has also seen strong growth in imports this year.


In contrast to imports, India’s exports to China are diversified. The top 5 categories have accounted for less than 50% of the total so far this year. And part of the reason for the sluggish export performance is the three large export categories – Ores, Iron & Steel and Organic chemicals – have either declined on a YoY basis or are flat on a YoY basis.

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