Important International institutions, agencies and fora- their structure, mandate.



According to provisional data from India’s commerce ministry, China regained its position as India’s top trade partner in 2020 despite high border tensions between the two countries.

Important points:

  • The two-way trade between India and China stood at USD 77.7 billion for the year 2020. Trade with China was USD 85.5 billion total in the previous year (2018-2019).
  • Now, China is the largest commercial partner displacing the US bilateral trade at USD 75.9 billion amid reduced demand for goods in the middle of the Covid-19 pandemic.
  • Total imports from China at USD 58.7 billion were more than India’s combined purchases from the USA and the UAE, which are its second- and third-largest trade partners, respectively.
  • India has only managed to increase its exports to China by about 11% from a year ago to USD 19 billion last year.
  • Thus, a bilateral trade gap with China stood at almost USD 40 billion in 2020, making it India’s largest.
  • Trade Gap/Deficit is the amount by which the cost of a country’s imports exceeds the value of its exports.

Measures Taken to Reduce Import Dependence on China:

  • The ban on more than 100 Chinese apps citing national security reasons.
  • It has increased scrutiny of Chinese investments in many sectors, and is weighing a decision to keep Chinese companies out of 5G trials.
  • The government recently put import restrictions on tyres, while also making its prior approval mandatory for foreign investments from countries that share land border with India to curb “opportunistic takeovers” of domestic firms – a move which will restrict FDI from China.
  • The Ministry of Commerce and Industry has also identified 12 sectors – food processing, organic farming, iron, aluminium and copper, agro chemicals, electronics, industrial machinery, furniture, leather and shoes, auto parts, textiles, and coveralls, masks, sanitisers and ventilators – to make India a global supplier and cut import bill.
  • To cut import dependency on China for APIs (Active Pharmaceutical Ingredients), the government in March 2020 approved a package comprising four schemes with a total outlay of Rs. 13,760 crore to boost domestic production of bulk drugs and medical devices in the country along with their exports.


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