This is imperative not only to mitigate economic risks but also to
bolster domestic industries and reduce dependency on single-country
imports, especially from a geopolitical competitor like China, he added.
"Over
the last 15 years, China's share in India's industrial product imports
has increased significantly, from 21 per cent to 30 per cent.
"This
growth in imports from China has been much faster than India's overall
import growth, with China's exports to India growing 2.3 times faster
than India's total imports from all other countries," the report said.
In 2023-24, India's total merchandise imports amounted to $677.2 billion, with $101.8 billion of that coming from China.
This means China accounted for 15 per cent of India's total imports.
Out of these imports from China, $100 billion or 98.5 per cent were in major industrial product categories.
"When
compared to India's global imports of these industrial products, which
total $337 billion, China's contribution is quite significant,
representing 30 per cent of India's imports in this sector. Fifteen
years ago, China's share was just 21 per cent," it added.
The key
sectors where New Delhi's dependence is rising significantly, include
electronics, telecom and electrical; machinery; chemicals and
pharmaceuticals; products of iron, steel and base metal; plastics;
textiles and clothing; automobiles; medical, leather, paper, glass,
ships, aircraft and remaining categories.
During April-January
2023-24, the electronics, telecom and electrical products sectors had
the highest import value at $67.8 billion, with China contributing $26.1
billion.
"This represents a substantial 38.4 per cent of the
total imports in this category, indicating a heavy dependence on Chinese
electronic goods and components," it said.
In the machinery sector, China accounts for $19 billion, which is 39.6 per cent of India's imports in the sector.
This underscores China's key role as a supplier of machinery to India, Srivastava said.
India's
chemical and pharmaceutical imports during the period stood at $54.1
billion. Out of this, $15.8 billion came from China.
This resulted
in a Chinese share of 29.2 per cent, highlighting the importance of
Chinese chemical and pharmaceutical products in India.
Similarly,
the report said the total imports for plastics and related articles
stand at $18.5 billion, with China providing articles worth $4.8
billion.
This accounts for 25.8 per cent of the total imports in this sector.
Srivastava
also said that half of the imports from China consist of capital goods
and machinery, indicating a critical need for focused research and
development in this area.
Intermediate goods like organic
chemicals, APIs (Active Pharmaceutical Ingredients) and plastics, which
represent 37 per cent of imports, show a pressing need for upgrading
these industries, he said, adding that consumer goods make up 12 per
cent of the imports, while raw materials are less than 1 per cent.
The
report added that many products imported from China, such as textiles,
apparel, glassware, furniture, paper, shoes and toys are from categories
dominated by micro, small and medium enterprises (MSMEs), and most of
these items could potentially be produced domestically.
"Overall,
India imports a broad array of products from China, from high to low
technology items, highlighting significant gaps in India's industrial
capabilities across various sectors," it added.
Chinese companies
are involved in India's energy, telecommunications, transportation
sectors and they play critical roles in smartphones, electronics,
electric and passenger vehicles, solar energy, engineering projects and
many other sectors, it said.
The report said that so far, imports
were carried out by Indian firms but now with the entry of Chinese firms
into the Indian market, India's industrial product imports are set to
rise at an accelerated pace.
"As the Chinese firms operating in
India will prefer sourcing most requirements from their parent firms,
Indian imports will rise sharply. For example, in the next few years,
every third electric vehicle (EV) and many passenger and commercial
vehicles on Indian roads could be those made by Chinese firms in India
alone or through joint ventures with Indian firms," the report said.
The
large-scale entry of Chinese automakers into India will impact the
domestic auto/EV manufacturers, firms working in the EV value chain
space and battery development, it added.
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