India's Growing Dependence on China for Industrial Goods Raises Supply Chain Risks
India’s Supply Chain Risk Grows As China Supplies 30% Of Industrial Goods, Flags GTRI
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A report by the Global Trade Research Initiative (GTRI) highlights India's increasing reliance on China for industrial goods, which constitute 30% of India's imports. With imports projected to rise to $131.6 billion by FY2026, any disruption could severely impact India's manufacturing sector and supply chains.
- 01India's imports from China for industrial goods account for 30% of total imports.
- 02Imports from China are projected to double from $65.2 billion in FY2021 to $131.6 billion in FY2026.
- 03India's exports to China are significantly lower, projected at $19.5 billion in FY2026.
- 04Approximately 98.5% of India's imports from China are industrial products.
- 05Key sectors affected include electronics, machinery, and organic chemicals.
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India's trade relationship with China has long been marked by a trade deficit, but a recent report from the Global Trade Research Initiative (GTRI) raises alarms about India's heavy dependence on China for industrial goods. Currently, 30% of India's imports are industrial products from China, a stark contrast to the 16% of total imports. This dependency poses significant risks to India's manufacturing sector, as disruptions in supply could halt production across various industries. In FY2023, India's imports from China reached $98.5 billion, and this figure is expected to rise to $131.6 billion by FY2026, doubling from $65.2 billion in FY2021. Conversely, India's exports to China are projected to decrease, with an expected $19.5 billion in FY2026, down from $21.2 billion in FY2021. The GTRI report notes that 66% of these imports are concentrated in critical sectors such as electronics, machinery, and organic chemicals, highlighting China's dominance in these areas.
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The heavy reliance on Chinese industrial goods means that any disruption could lead to significant delays in manufacturing and increased costs for businesses in India, potentially affecting prices for consumers.
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