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Question
There is a general perception going around in India that there is sudden increase in dumping of Chinese goods into India, which have implications for manufacturing sector in India, and also that we do not engage ourselves in trading with our neighbouring nations. Look at the following table, which shows exports from India to, and imports from, Pakistan and China. From newspapers and websites and listening to news, collect the details of goods and services transacted in trading with our neighbours. In order to get detailed information relating to international trade, you can log on to the website: http:/dgft.gov.in.
| Country | Exports from India ( Rs in crore) | Imports to India (Rs in crore) | ||||
| 2004-2005 | 2024-2025 | Compound Rate of Growth (%) |
2004-2005 | 2024-2025 | Compound Rate of Growth (%) |
|
| Pakistan | 2,341 | 4,720 | 3.6 | 427 | 4 | −20.8 |
| China | 25,232 | 1,20,617 | 8.1 | 31,892 | 9,59,666 | 18.5 |
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Solution
India trades with neighbouring countries such as China and Pakistan, although the volume and nature of trade differ considerably.
| Country | Major Goods Exported from India | Major Goods Imported into India |
|---|---|---|
| Pakistan | Pharmaceuticals, chemicals, agricultural products, machinery and some textiles | Very limited imports due to trade restrictions |
| China | Iron ore, chemicals, petroleum products, cotton, engineering goods and some agricultural products | Electronic goods, machinery, electrical equipment, chemicals, computer and mobile-phone components, solar equipment and industrial inputs |
According to the given data for 2024-25:
- India’s exports to Pakistan were about ₹ 4,720 crore, while imports were only about ₹ 4 crore.
- India’s exports to China were about ₹ 1,20,617 crore, while imports from China were much higher at about ₹ 9,59,666 crore.
- Thus, India has a large trade deficit with China, as it imports considerably more from China than it exports there.
The large inflow of cheaper Chinese manufactured goods can create strong competition for Indian manufacturers, particularly small and medium industries. However, many imports from China are also machinery, components and intermediate goods used by Indian industries.
Thus, India should strengthen domestic manufacturing, improve competitiveness and diversify its trade with neighbouring countries. At the same time, international trade should continue where it provides useful goods, technology and economic benefits.
