Post-pandemic trade between China and India has shown a drastic increase in the first three quarters of 2021 according to the data released by China’s General Administration of Customs (GAC). India’s bilateral trade with China has increased 49.4% year-on-year (YoY) according to the numbers by GAC.

The total trade between India and China has reached USD 90.38 billion in the first three months of the year and is set to reach USD 100 billion by the end of 2021. As for imports of goods and services from China to India, the numbers showed a total of USD 68.46 billion worth of goods and services imported which represents a 51.5% increase compared to 2020 which was heavily impacted by the global pandemic and 21.6% compared to the pre-pandemic year of 2019 for the same period. The current balance of trade of India is a USD 46.55 billion trade deficit with China which is a significant increase from USD 29.86 billion in 2020 but is comparable to the USD 42.96 billion trade deficit in 2019. Furthermore, China has been India’s main trade partner in Q2, with India’s other key trade partners including the US, the UAE, Saudi Arabia and Singapore.

The main Indian exports to China have been iron ore, cotton, and raw material-based commodities with India importing the following goods from China the most: smartphones, automobiles components, plastic and metal goods, chemicals, and pharmaceutical ingredients. 

Since India is heavily involved in the assembly and final production of electronic goods, domestic firms were in search of the most affordable and fastest to deliver components. India’s domestic manufacturing of components is yet to reach the sustainable level for the industry, thus, reliance on international trade is essential. Moreover, China and India have created a strong foundation for international trade and the exchange of goods and services prior to the global pandemic and India continues to derive benefits from increasing such trade.

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