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India’s Imports From China to See a Major Decline: Report

India’s Imports From China to See a Major Decline: Report

Demand for Chinese products in India is decelerating and imports from the country would see a “major hit” in the coming months, according to a report, which revealed a significant shift in the consumption pattern of Indian consumers towards domestic products.

The analysis by the PHD Chamber of Commerce & Industry said increasing competitiveness of India’s production capabilities to match its Chinese counterparts due to the improvement in the ease of doing business was another factor responsible for the trend.

Indian production capabilities are becoming competitive as compared with China because of many reasons such as improvement in the ease of doing business. Also, there is a significant shift in the consumption pattern of Indian consumers from the Chinese products to domestic products.

“As the Make in India programme is getting pace month after month, we can anticipate a significant improvement in the balance of trade with China,” said PHD Chamber’s President Mahesh Gupta.

The analysis is based on around 2,000 responses from the consumption segment and more than 100 industry stakeholders who participated in the survey.

“Demand for industrial products such as raw materials etc. is declining by 10-15 percent and demand for consumption goods is less by 20-25 percent,” said the study.

India’s imports from China increased more than 500 percent from USD 10 billion to USD 61 billion during the last ten years from 2005 to 2015. China’s share in India’s imports increased from 7 percent in 2005 to around 16 percent in 2015, said the analysis by PHD Research Bureau.

However, the trend has been reversed and growth of imports from China decelerated by 8 percent in the first six months of the current financial year 2016-17.

“The growth of imports from China has been decelerating and is in the negative trajectory in the recent months; no enthusiasm is seen in the upcoming months too,” Gupta said. Despite the festive season imports from China decelerated (-) 14.5 percent in the month of September whereas imports from World decelerated (-) 2.5 percent, the study revealed.

Majority of the decline in India’s imports from China has been witnessed in products such as ships and boats, tobacco products, aquatic products, pearls and precious stones, musical instruments and parts thereof, mineral fuels and oils, lead and articles thereof, cocoa products, and wool and products thereof, further revealed the analysis.

It highlighted the pivotal role of investments for the long term sustainable goals. “FDI inflows from China to India between April 2000 and March 2015 stood at USD 288.512 billion wherein China’s share was roughly 0.47 percent which rightfully indicates that China is not a significant and substantial investor in India as compared to Singapore, Mauritius and Switzerland,” the report pointed out.

 

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