China’s Contribution to India’s Electronic Trade Deficit Rising Since 2019

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China had contributed 67.61 per cent to India’s electronic trade deficit in 2017. The numbers were down to 51.03 per cent in 2018

India’s electronic trade deficit in 2021 comprised $7.13 billion from China. Data released by the Ministry of Commerce shows that China’s contribution in India’s elecronic trade defcit has been on a rise since 2019.

China contributed 59.11 per cent to India’s electronic trade deficit as of November 2021. These figures, in 2020, were down to 51.88 per cent. Industry gurus are of view that jump in the same is due to the outbreak of Corona Virus. It is worth mentioning here that China had contributed 67.61 per cent to India’s electronic trade deficit in 2017. The numbers were down to 51.03 per cent in 2018.

A report by the Hindu, quotng experts, notes that these numbers may rise even after Covid subsides. The rising number might also be a concern as the government of India has introduced electronic manufacturing schemes worth hundreds of thousands of crores. These PLI schemes have covered almost all the verticals of electronics manufacturing.

The government of India, as a matter of fact, has recently released a 5-year roadmap and vision document for the electronics sector with an aim to grow electronics manufacturing and exports into a $300 billion market by 2026. The domestic market, as per the report, is expected to increase from US$65 billion to US$180 billion over the next 5 years. This will make electronics amongst India’s 2-3 top ranking exports by 2026. Of the US$300 billion, exports are expected to increase from the projected US$15 billion in 2021-22 to US$120 billion by 2026.

The government of India, in a bid to attract more electronic manufacturers to the country, is also planning to introduce changes to the existing labour laws and IT Hardware Production Linked Incentive (PLI) scheme.

“I discussed the issue of setting up manufacturing units, with a footprint of over 40,000 and up till 1 lakh, with the labour minister (Bhupendra Yadav),” Ashwini Vaishnaw, communications & IT minister had recently told reporters. MeitY, from the very first PLI scheme that was introduced in India in 2020, has been clear that it is looking to encourage global champions to set shop in the country and, at the same time, is also looking to create global champions from India.

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