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China replaces US as India's top trade partner despite govt's effort to curb business with Beijing

Bilateral trade between India and China stood at $77.7 billion in 2020


China is back as India's top trade partner in 2020, despite New Delhi's efforts to curb business with Beijing following a bloody border conflict. The bilateral trade between India and China stood at $77.7 billion last year, according to provisional data from India’s commerce ministry. 

While the trade value has fallen compared to $85.5 billion of 2019, it was enough to make China the largest commercial partner displacing the US with whom India's two-way trade came in at $75.9 billion amid muted demand for goods in the middle of a pandemic, Bloomberg reported.

India's trade relations with China was on a treacherous track last year as the Narendra Modi government banned more than 250 apps, including TikTok, Helo, We Chat and PUBG, for alleged Chinese links. The Indian government also slowed approvals for investments from China and called for self-reliance after a deadly clash along their disputed Himalayan border. 

Yet, India's heavy reliance on Chinese-made heavy machinery, telecom equipment and home appliances continues, the ministry data shows. As a result, the bilateral trade gap with China was at almost $40 billion in 2020, making it India’s largest.

Total imports from China at $58.7 billion were more than India’s combined purchases from the US and the UAE, which are its second- and third-largest trade partners respectively. Heavy machinery imports accounted for 51 per cent of India’s purchases from its neighbour.

At the same time, India also managed to increase its exports to China by about 11 per cent from a year ago to $19 billion last year. 

The relations between the two nations soured after they were involved in a Himalayan border dispute last June that saw at least 20 Indian soldiers and five PLA men killed in a clash.

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