India-China Trade Resilience Tested in H1 of 2023

 The India-China trade, which had risen sharply in recent years despite bilateral tensions over the border dispute, showed the first signs of a slowdown in years falling by 0.9 per cent in the first half of this year.

This came as China's overall foreign trade declined by about five per cent as its economy struggled to recover from the COVID-19 pandemic. Exports to India in the first half of this year totalled USD 56.53 billion compared to USD 57.51 billion last year registering a decline of 0.9 per cent.

India's exports to China during the same period totalled USD 9.49 billion compared to USD 9.57 billion last year. The trade deficit for India stood at USD 47.04 compared to USD 67.08 billion last year. The decline of India-China trade in the first half of this year was due to a slump in China's exports as its economy struggled to make a post-COVID recovery.

China's total trade including imports and exports fell nearly 5 per cent from a year earlier in dollar terms. Exports slipped 3.2 per cent and imports declined 6.7 per cent. Shipments to the Association of Southeast Asian Nations, which is China's largest trade partner and one that provided major support to its export sector earlier this year, fell by 16.86 per cent compared to a year earlier.

Exports to the European Union, declined by 12.92 per cent year on year and the United States tumbled 23.7 per cent from a year earlier. The data released by the Chinese customs showed that inflation is still prominent in developed world economies, geopolitical conflicts are still taking place and there is not enough drive for immediate growth in global demand.

Although the foreign trade sector was still expected to head towards a positive direction in the longer term, the General Administration of Customs spokesman, Lu Daliang said that China would be facing more pressure to boost the stable growth of foreign trade in the later half of the year.

Despite the decline in India-China trade in the first half of this year, it still remains one of the major bilateral trade partners in the world. Last year was a bumper year for India-China trade as it touched an all-time high of USD 135.98 billion despite the continued chill in the bilateral ties over the military standoff in eastern Ladakh in May 2020.

India-China Trade Slows in H1 of 2023: Economic Recovery Struggles The India-China trade which had grown significantly in recent years despite bilateral tensions, showed the first signs of a slowdown in years as it fell by 0.9 per cent in the first half of this year.

This decline was attributed to the slump in China's exports and imports due to the COVID-19 pandemic. Exports to India in the first half of this year totalled USD 56.53 billion compared to USD 57.51 billion last year while India's exports to China during the same period totalled USD 9.49 billion compared to USD 9.57 billion last year.

This resulted in the trade deficit for India standing at USD 47.04 compared to USD 67.08 billion last year. Inflation in developed world economies, geopolitical conflicts and lack of drive for immediate growth in global demand have all played a part in the decline of India-China trade in the first half of this year.

It is expected that China's foreign trade sector will still head towards a positive direction in the longer term, but the General Administration of Customs spokesman said that China would be facing more pressure to boost the stable growth of foreign trade in the later half of the year.

Despite the slow down in the first half of this year, India-China trade remains one of the major bilateral trade partners in the world. Last year, it touched an all-time high of USD 135.98 billion.

This shows that the India-China trade has been resilient despite the chill in the bilateral ties over the military standoff in eastern Ladakh in May 2020.