Bilateral trade deficit narrows sharply in November as India’s imports of Chinese goods decline
India’s imports from China as well as its trade deficit declined sharply in November, marking an exception to a record month for Chinese exports around the world that registered the fastest growth in almost three years and underlined China’s continuing recovery amid a pandemic-induced global slump.
Bilateral trade reached $78 billion over the 11-month period, sharply lower than 2019’s $84.4 billion. China’s shipments to India at the end of November accounted for $59 billion, sliding 13% and helping narrow India’s deficit to $40 billion, from $51.6 billion in the year-earlier period. India’s annual trade deficit with its northern neighbour had shrunk by 2% in 2019 to $56.95 billion, marking the first decline since 2005.
The slump in China’s exports to India was broadly expected after data from India’s Ministry of Commerce last week showed a 13.3% decline in India’s overall imports in November. India’s imports of electrical and non-electrical machinery – items that have traditionally had the biggest share in China’s exports to the country — slid by 13.4%, the Centre’s official data showed.
Overall, China’s exports surged 21.1% in November, customs data showed, the fastest growth since February 2018, Reuters reported. The pace of increase was almost double October’s 11.4% expansion. November’s exports of $268 billion were the highest on record amid the continuing global economic slump and lockdowns in many of China’s biggest trading partners.
Electrical machinery and equipment was India’s biggest import from China in 2019, worth $20.17 billion. Other major imports last year were organic chemicals ($8.39 billion) and fertilisers ($1.67 billion), according to data available with the Indian Embassy in Beijing. India’s top exports to China in 2019 were iron ore, organic chemicals, cotton and unfinished diamonds. India was the fourth largest exporter of iron ore to China after Australia, Brazil and South Africa.
India’s exports to China were up 16% in November reaching $19 billion after 11 months of this year, likely driven by a recovery in Chinese imports of iron ore, which were up 16% according to China’s General Administration of Customs.
In November, China also agreed to import rice from India for the first time in three decades, with 1,00,000 tons of exports of broken rice contracted for December to February at $300 per ton, Reuters reported. The rice purchase was a “purely commercial move” as the price was “far cheaper than that of its domestic counterparts”, Jiao Shanwei, editor-in-chief of a Chinese website on grains news, told the Global Times.