India-China trade in the first half of the financial year broke all records, with the foreign trade growing 62.7 per cent year-on-year, which is the highest among China's biggest trade partners.
The remarkable growth in India-China bilateral trade comes in the backdrop of huge military tensions between both the countries across the Line of Actual Control along the border.
The data released by China's General Administration of Customs (GAC) on Tuesday showed China's imports and exports to India reached $57.48 billion in the first half of the fiscal year. Both imports and exports grew significantly -- imports 69.6 per cent YoY and exports 60.4 per cent YoY, respectively. This is also higher than pre-Covid levels of $44.72 billion worth trade during H1 FY20.
India exported goods worth $14.7 billion to China and imported $42.6 billion worth of goods from the neighbouring country, the Chinese government data shows.
The rise in bilateral trade is being attributed to India importing medical goods from China as the country ramped up domestic production of Covid-19 vaccines amid the second Covid-19 wave, Zhao Gancheng, research fellow, Shanghai Institute for International Studies told China-based The Global Times.
The Chinese foreign affairs ministry's data on the two-way trade shows India imported 26,000 ventilators and oxygen generators, over 15,000 monitors and 3,800 tonnes of drugs and medical material from the neighbouring country.
The growth in bilateral trade is, however, lower than Jan-May figures on a YoY basis. During that period, two-way trade grew 70.1 per cent in dollar terms to $48.16 billion. The Chinese government figures show India's export to China grew 90.2 per cent YoY, while Chinese export rose 64.1 per cent to the country.
Experts have cited that a slight decline in the bilateral trade in June may be due to a reduction in daily Covid-19 cases in India and a drop in iron ore trade.
In the initial four months from Jan-April, China imported 90 per cent of the total iron ore exported by India. However, concerns were raised by steel manufacturers in India over the possible shortage of iron ore to fulfil the domestic needs.
They even called for placing curbs on the export of iron ore. Moreover, China also attained sufficient domestic production of iron ore, leading to a fall in imports from India.
Amid the growing geopolitical tensions between both countries, India's trade with China had declined 5.6 per cent to a three-year low at $87.6 billion in 2020. However, China still emerged as India's biggest trading partner, while surpassing the United States.
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