India’s imports of electronic goods such as laptops, personal computers (PCs), integrated circuits and solar cells from China declined during 2022-23, according to a report by economic think tank GTRI. The fall in imports is notable in electronic items where the PLI (production linked incentive) scheme is operational, the report by Global Trade Research Initiative (GTRI) said.
Import of medical equipment declined 13.6 percent to $2.2 billion (roughly Rs. 18,087 crore) last fiscal year as compared to 2021-22. Similarly, import of solar cells, parts, diodes slumped 70.9 percent to $1.9 billion (roughly Rs. 15,620 crore) in 2022-23.
The report stated that import of laptops, PCs slipped 23.1 percent to $4.1 billion (roughly Rs. 33,707 crore) and that of mobile phones came down by 4.1 percent to $857 million (roughly Rs. 7,000 crore) in last financial year as compared to 2021-22.
Inbound shipments of integrated circuits contracted by 4.5 percent to $4.7 billion (roughly Rs. 38,640 crore). Import of urea and other fertilizers declined 26 percent to $2.3 billion (roughly Rs. 18,909 crore) in 2022-23.
However, import of lithium-ion batteries surged about 96 percent to $2.2 billion last fiscal year, it said adding the adoption of electric vehicles may increase such imports steeply.
“India’s imports from China have shown signs of slowing down, with three data points indicating a decline. Firstly, India’s electronics imports from China have decreased from $30.3 billion in FY22 to $27.6 billion in FY23. Secondly, India’s total goods imports from China grew at a lower rate of 4.2 percent during FY23, compared to global imports, which grew at a higher rate of 16.1 percent,” GTRI co-founder Ajay Srivastava said.
Lastly, China’s share in India’s merchandise import decreased from 16.4 percent in FY18 to 13.8 percent in FY23, a decline of 15.7 percent.
Product categories where the country’s imports from China have registered growth include machinery, chemicals, steel, PVC resin and plastics.
It also said China’s share in India’s merchandise imports decreased from 16.4 percent in 2017-18 to 13.8 percent in 2022-23.
Despite the decline, China remains India’s top import supplier, and India is critically dependent on China for various products, the report said, adding “Imports from China are high for most countries and India is not an outlier”.
India’s total goods import from China during 2022-23 touched about $91 billion (roughly Rs. 7,48,161 crore). It was $94.6 billion (roughly Rs. 7,77,758 crore) in 2021-22.
Further at the exports front, China is India’s fourth largest export destination, with the US, UAE, and Netherlands as the top three partners.
Indian exports grew to all these three nations but declined for China in the last fiscal. The country’s outbound shipments to China declined 36 percent to $13.6 billion in 2022-23.
Srivastava said India’s fate in electronics and computer hardware production was sealed with India’s signing of the Information Technology Agreement (ITA) in 1997 that made importing any import duties on such products illegal.
“PLI is trying to undo the damage in a limited way. Positive results are visible in the decrease in importing electronic products from China,” he said adding that to move at a faster pace, India must invest in deep manufacturing.
“For EV batteries, we must produce Lithium-ion cells; for laptops, we must make PCB; for mobile phones, we must make components and not merely the outer shell of the final product,” he said.