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Context: The favourable trade balance that China has enjoyed with India, since bilateral commerce began to boom in the early 2000s, has cumulatively exceeded $1 trillion, according to estimates.

Details:

• The trade gap has particularly widened in the past decade. In 2021, annual two-way trade crossed $100 billion for the first time, reaching $125.6 billion, with India’s imports accounting for $97.5 billion, pegging the imbalance at close to $70 billion.
• Trade ties began to boom since the early 2000s driven largely by India’s imports of Chinese machinery and other equipment, up from $3 billion in the year 2000 to $42 billion in 2008, the year China became India’s largest trading partner.
• In pure statistics, Chinese businesses earned that much money from India.
• While some economists say India’s trade imbalance with China should not be viewed in isolation – for instance, pharmaceuticals that India exports to the world require ingredients that are imported from China –but an imbalance over an extended period of time posed problems.
• Moreover, Chinese commitments to India to import substantially more Indian goods, particularly pharmaceuticals, have not materialised, although Chinese imports of Indian seafood are one area that has recently shown robust growth.
• In the six months ended June, India’s imports from China surged 34,5% to reach a record $57.51 billion, according to China’s trade figures released in July. India’s exports to China, however, shrank by 35% and accounted for only $9.57 billion of the $67.08 billion two-way trade.
• India’s biggest imports last year were electrical and mechanical machinery, chemicals used in industrial production, active pharmaceutical ingredients and auto components. India also imported medical supplies during the pandemic.

https://www.thehindu.com/business/Economy/chinas-total-trade-surplus-with-india-surpasses-1-trillion/article66031147.ece