India Wants to Buy Fewer Chinese Imports, but Keeps Needing More

To understand India’s trade imbalance with China, look inside Indian factories.Many of the big machines are Chinese, as are the electronic components and materials feeding them.An electric vehicle plant needs rare-earth magnets from China, while Indian drugmakers rely on Chinese pharmaceutical ingredients.India has spent years trying to become less dependent on its giant neighbor.

Instead, it has been buying more.The total volume of goods exchanged between the two countries has nearly doubled over the past five years, to $151 billion a year.But the trade has become more unbalanced than ever.

India now buys roughly seven times as much from China as it sells there.That surge came even as relations between India and China went into a deep freeze.A bloody hand-to-hand skirmish at the Himalayan border in 2020 killed at least 24 soldiers and brought a run of high-level diplomacy to an abrupt halt.

On Saturday, Xi Jinping, China’s top leader, will set foot in India for the first time in more than six years.For India, the imbalance creates a difficult problem.Its industrial ambitions depend heavily on Chinese goods, even as that dependence exposes India to strategic risks and makes it harder for its companies to gain the scale needed to compete with Chinese rivals.

Now, with the U.S.-Israeli war with Iran driving up energy costs, Chinese imports are widening India’s global trade deficit and weakening its currency.India is not alone in struggling with a flood of low-cost Chinese goods.China’s record trade surplus reached nearly $1.2 trillion last year, deepening concerns among trading partners over the growing dominance of Chinese companies across industries.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.

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