Despite the worst frost in bilateral ties in decades, trade between India and China hit a record $125 billion in 2021, according to Chinese customs data released on Friday.
In 2021, bilateral commerce between India and China was valued at $125.66 billion, increasing 43.3 percent from $87.6 billion in 2020.
According to statistics provided by the General Administration of Customs (GAC) and quoted by the tabloid Global Times on Friday, China’s exports to India in 2021 were $97.52 billion, up 46.2 percent, while China received $28.14 billion worth of commodities from India, up 34.2 percent.
The trade disparity between the two countries remained $69 billion in China’s favour.
The trade deficit has been a source of persistent irritation between New Delhi and Beijing, with India arguing that, despite promises, China has denied Indian companies access to industries such as pharmaceuticals.
According to GAC, India was China’s 15th largest trade partner in 2021.
“Analysts ascribed the increase in trade to the complimentary elements of the two countries’ industrial chains. For example, the Indian pharmaceutical industry, which is a cornerstone industry, imports roughly 50-60% of chemicals and other supplies from China, according to the Global Times study.
In 2020, India-China trade fell by 5.6 percent to $87.6 billion, the lowest level since 2017. Last year, though, China overtook the United States as India’s largest trading partner.
Following a devastating second wave of the coronavirus pandemic, Chinese industries noticed a rise in demand for medical equipment from India in the first half of the year.
According to an explanatory note published online by the Indian embassy, the growing trade deficit with China can be attributed to two factors: a limited basket of commodities, mostly primary, for exporting to China and a lack of market access for most Indian agricultural products and sectors where India is competitive, such as pharmaceuticals and information technology.
In the midst of bilateral tensions, the Chinese report stated that the trade data “is just another piece of proof that New Delhi is unable to reduce its reliance on the Chinese market.”
Since May 2020, when a violent clash in the Pangong lake area led to both sides steadily placing tens of thousands of soldiers as well as heavy equipment along the border, Indian and Chinese border troops have been trapped in a border standoff in eastern Ladakh.
Until now, several rounds of military and diplomatic talks have only resulted in partial troop pullout.
Separately, GAC statistics released on Friday revealed that commerce between China and the United States increased by 28.7% to $755.6 billion in 2021, keeping a robust growth trend and contributing 12% to China’s record $6 trillion in foreign trade for the year.
In 2021, China’s exports to the United States increased by 27.5 percent, while imports increased by 32.7 percent, totaling $179.53 billion.
“After Asean and the European Union, the United States remained China’s third-largest trading partner. China’s trade with the United States was double that of its fourth-largest trading partner, Japan, which totaled 2.4 trillion yuan, according to the Global Times.