Dominance Of Chinese Imports Harms Local Businesses In India: GTRI Report (Photo @Pixabay)
The rising imports of goods categories which are already being made by domestic businesses in India, such as umbrellas, toys, certain fabrics, and other instruments, are negatively impacting local productions. A report by the think tank Global Trade Research Initiative (GTRI) noted the dominance of Chinese imports, causing increased competition for the domestic market in the country.
The report highlighted that during January to June 2024, India exported goods worth only USD 8.5 billion, while imports stood at USD 50.4 billion, resulting in a trade deficit of USD 41.9 billion. The low exports and high imports make China India’s largest trade deficit partner. The inflexibility of Chinese products has left Indian small enterprises operating in products that the country imports from China, which has posed a threat to the local businesses. In product categories such as glassware, leather, and toys, China’s share in India’s total market for these items has increased to over 50 percent, the report said.
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The report also underlined that China supplies 95.8 percent of India’s umbrellas and sun umbrellas ($31 million) and 91.9 percent of artificial flowers and human hair articles ($14 million), adding that the neighboring country’s share in glassware has reached 59.7 percent, handbags 54.3 percent, and toys 52.5 percent, reflecting the trend that the Chinese products are replacing local products.
Notably, in categories where Indian artisans once excelled, such as ceramic products with 51 percent and musical instruments with 51 percent, the ascendancy of Chinese imports is causing serious threats to local producers, the report analysed.
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The report further observed that the Chinese imports are making considerable impact on India’s micro, small, and medium enterprises, especially in producing paper and paperboard products ($371.5 million, 24.7 percent), essential oils and cosmetics ($160.8 million, 24 percent), and edible preparations ($22.2 million, 21.6 percent). As Chinese imports continue to increase, several Indian industries are going through diminished market opportunities.
The report also expressed concern over the growing dependence on imported goods, calling it a threat to India’s economic sovereignty. The heavy reliance on foreign imports is eroding the market share. It also flagged concern over rising India’s industrial goods imports from China, noting that the country exported $8.5 billion to China while importing $50.4 billion from January to June this year. Notably, about 98.5 percent of imports from China, or $49.6 billion, are industrial products.
