India’s Reliance on China for Electronic

Context: In FY24, China regained its status as India’s top trading partner, a position it has held six times in the past ten years, primarily due to its high volume of exports to India.

India-China Trade Dynamics

• Trade Imbalance: India’s trade with China is characterised by a significant trade deficit, which has been widening rapidly. In FY24, the trade deficit with China reached a record $85.1 billion.

• Import Profile: A large portion of India’s imports from China consists of electronics and electrical items. From FY15 to FY24, India imported:
  • Mobiles/telephones: $75 billion
  • Automatic data processing units: $37 billion
  • Semiconductor devices and diodes: $28 billion
  • Electronic integrated circuits: $27 billion
• Dependency: India’s dependency on China for key electronic items remains high, sourcing
  • 54% of its mobiles/telephones,
  • 56% of its automatic data processing units,
  • 70% of semiconductor devices and diodes, and
  • 32% of electronic integrated circuits are from China.

India-U.S. Trade Dynamics

• Balanced Trade: Contrasting with China, India’s trade relationship with the U.S. shows a surplus, favouring India.
  • In FY24, the trade surplus with the U.S. was at its highest ever at $36.7 billion.
• Trade Growth: Both exports to and imports from the U.S. have grown, with exports increasing more significantly than imports.

Trade with Other Key Partners

• Russia: The trade deficit with Russia has notably increased from $6.6 billion in FY22 to $57.2 billion in FY24, largely due to increased oil imports at discounted prices following Western sanctions.
• The Netherlands: India’s trade surplus with the Netherlands has risen due to the re-export of petroleum products refined from Russian crude oil.
• Approximately 40-45% of the crude oil from Russia is processed and exported as petrol, diesel, and other products to the Netherlands, which then redistributes these products among its neighbours.

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