India's Growing Dependence On Chinese Imports Raises Trade Concerns: Mckinsey Report

(MENAFN- KNN India) New Delhi, Feb 21 (KNN) India is becoming increasingly reliant on upstream imports from China for goods that are later exported to key markets like the United States and Europe, according to a recent study by McKinsey & Company on shifting global trade patterns.

This growing dependence highlights an evolving trade dynamic that could have long-term implications for India's export-driven sectors.

Between 2017 and 2023, India's imports from China grew at an average rate of 6 per cent annually, driven primarily by chemicals, including pharmaceuticals, and machinery.

These sectors form the backbone of India's manufacturing and export industries, making the country more vulnerable to supply chain disruptions and pricing fluctuations originating from China.

Simultaneously, India's exports to China have been on the decline, pointing to an increasingly asymmetrical trade relationship between the world's two largest developing economies.

This shift raises concerns over India's trade balance and its ability to reduce dependency on Chinese inputs while maintaining competitive export levels.

Trade experts suggest that India must diversify its supply chains and invest in domestic manufacturing to mitigate potential risks.

Strengthening trade partnerships with other nations and boosting self-reliance in key sectors could help India balance this growing asymmetry.

As global trade patterns continue to evolve, India's strategic response will play a critical role in shaping its future economic resilience and maintaining its standing in global export markets.

(KNN Bureau)

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