Spurred to an extent by India importing medical goods from China to combat the deadly second wave of the Covid-19 pandemic, trade between the two neighbours soared by more than 70% year-on-year to over $48 billion in the first five months of 2021, China’s customs data showed on Monday.
Calling it a “spectacular growth”, Chinese state media interpreted the increase in bilateral trade as a sign of resilience in trade ties between the two nations despite conflict at the border and political differences.
“Trade between China and India soared 70.1% in US dollar terms in the first five months of this year to $48.16 billion, according to Chinese customs data released on Monday. Specifically, Chinese exports to India grew 64.1% year-on-year from January to May, while imports surged 90.2%,” the tabloid Global Times reported.
The India-China trade volume was higher than the trade that Beijing conducted with other trading partners, the report said.
The latest statistics were released by China’s General Administration of Customs (GAC) on Monday.
As per data available in China, the rise in trade, specifically Chinese exports to India, rose sharply between April and May.
Until April, the bilateral trade in goods between China and India in the first quarter of 2021 grew with the total trade volume reaching $27.7 billion, a year-on-year increase of 42.8%.
The rise could be attributed to the increase of exports of Chinese medical goods and equipment by Indian companies to fight a surge in Covid-19 cases over the last couple of months.
“If anything, these extraordinary growth rates show that China-India trade has largely shrugged off the impact of the political tensions caused by the border friction last year, bouncing back quickly,” the state media report said.
India-China trade in 2020 had declined by 5.6% to $87.6 billion, the lowest since 2017. But China still overtook the US to become India’s largest trading partner last year.
According to the Indian embassy in Beijing, though overall bilateral trade between the two countries grew exponentially – notwithstanding a fall last year because of the Covid-19 pandemic – India continues to be saddled with a big trade deficit.
“The growth of trade deficit with China could be attributed to two factors: narrow basket of commodities, mostly primary, that we export to China, and market access impediments for most of our agricultural products and the sectors where we are competitive in, such as pharmaceuticals, IT/IteS, etc. Our predominant exports have consisted of cotton, copper and diamonds or natural gems,” the Indian embassy wrote on its website under the section “India-China trade and economic relations”.
Chinese companies saw an increase in demand from India for medical equipment, especially oxygen concentrators, in the last couple of months following a devastating second wave of the coronavirus pandemic.