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What are the reasons for this decline in India China trade

Trade between India and China has declined to below 0.90 per cent in the first half of this year, despite rising over the past several years. According to Chinese customs data.

Why does India have a trade deficit with China

Yes, that is correct. India-China trade is down 0.90 percent in 2023. This is the first time that trade between the two countries has declined in several years. There are a number of factors that could be contributing to this decline, including the ongoing trade war between the United States and China, as well as the COVID-19 pandemic.

The trade deficit between India and China is also widening. In 2022, the trade deficit stood at $101.02 billion. This means that India is importing more goods from China than it is exporting to China. The widening trade deficit is a concern for Indian policymakers, as it is putting a strain on the Indian economy.

It is too early to say whether the decline in India-China trade is a temporary or permanent trend. However, it is clear that the two countries need to find ways to improve their trade relationship in order to benefit both economies.

Here are some of the reasons why India-China trade is down

The ongoing trade war between the United States and China has made it more difficult for Chinese companies to export goods to the United States. This has led some Chinese companies to look for new markets, such as India. However, the decline in Indian demand for Chinese goods has offset this trend.
The COVID-19 pandemic has disrupted supply chains and caused delays in shipping. This has made it more difficult for Indian and Chinese companies to trade with each other.
The Indian government has imposed stricter regulations on imports from China. This has made it more difficult for Chinese companies to sell their goods in India.

It is important to note that these are just some of the reasons why India-China trade is down. There may be other factors that are also contributing to the decline.

According to ThePrint, one of the major reasons for the decline in exports is the fall in global commodity prices due to concerns of a recession in the global economy. Due to the slump in China’s manufacturing in the wake of Covid lockdowns, iron ore and copper exports have declined sharply in value. Meat and cotton exports from India have also declined. China's dominance in low cost manufacturing and India's poor manufacturing capacity underpinned by lack of reforms in Land, labor and capital utilisation are also some of the reasons for India-China trade deficit,

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