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India- China Trade Deficit:
News:
- According to a research study, India can potentially reduce its trade deficit with China by $8.4 billion over FY21-22.
- $8.4 billion is equivalent to 17.3% of the deficit with China and 0.3% of India’s GDP.
More from the Study:
- The reduction in the deficit can be achieved by the rationalisation of just a quarter of India’s imports from that country in select sectors where India has well-established manufacturing capabilities.
- The domestic manufacturing sector can substitute 25% of the total imports from specified sectors in the first phase.
India- China Trade Scenario:
- India's import from China stood at $65.1 billion and export of $16.6 billion in FY20.
- India recorded a trade deficit of $48.5 billion with China in FY20.
- Over the past 3 decades, India’s exports to China grew at a CAGR of 30% but its imports expanded at 47%, leading to lower capacity utilisation of domestic players in a few sectors.