India’s exports to China surged 53% on a year-over-year basis in the month of October and touched $1.24 billion according to the data released by the customs department. India’s exports to China during October 2016 stood at $0.81 billion. Despite the record growth in exports, trade deficit between the two countries is still huge. Trade deficit for the October month stood at $3.86 billion.
Though the bilateral relationship between the two countries is not very steady, trade continues to grow significantly. The overall trade between India and China increased by 13.56% for the month of October. China’s exports to India also grew significantly by 6.87% on a year-over-year basis and reached $5.09 billion in October. Various commodities including precious stones, pearls, organic chemicals, cotton, ores, etc. are exported to China.
In the first seven months of 2017, trade between India and China increased by 40.69% on a year-over-year basis. This huge trade also increased the trade deficit between the two countries. India’s trade deficit to China currently stands at $44.5 billion for the first seven months of 2017. Last year, the trade deficit between the two countries reached over $52 billion.
Trade is one of the significant factors in the bilateral relationship between the two countries. China is renowned as the manufacturing hub of the world. It goes without saying that India imports a lot of manufactured goods from China. Despite the occasional strain and border dispute between the countries, trade continues to flourish between the two highest populated countries in the world.
As of now, iron ore continues to be the major commodity among india’s exports to China. India must also focus on various other products in order to minimize the trade deficit. India currently has a great potential for export in various areas such as IT services, pharmaceuticals, biotechnology, education, tourism, and finance.