India's Trade Deficit With China Balloons to $112 Billion Despite Tariffs
· Business · BBC News, CNBC, Fortune
India's trade deficit with China has expanded to $112 billion this year, up from $44 billion in 2020, even as political and security ties remain strained following the 2020 Galwan Valley clashes. While New Delhi raised tariffs on imported toys from 20% to 70% and successfully reduced toy imports from nearly $300 million to $100 million while boosting exports to $200 million, the broader industrial sector remains heavily dependent on Chinese goods. China currently supplies over 30% of India's industrial imports and is the source for more than 100 critical products, with bilateral trade deficits projected to potentially reach $134 billion. Exports from India to China have stayed below pre-pandemic levels despite industrial imports doubling over the same period. Prime Minister Narendra Modi and Chinese President Xi Jinping vowed to address these structural trade imbalances during a meeting on the sidelines of the BRICS summit in Delhi in September.
Why it matters
The widening trade deficit grants Beijing substantial leverage over Indian industry and poses a formidable challenge for New Delhi as it attempts to rebalance economic ties without disrupting critical supply chains.
Read the original report — BBC News
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