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 per cent to USD 2.2 billion last fiscal year as compared to 2021-22. Similarly, import of solar cells, parts, diodes slumped 70.9 per cent to USD 1.9 billion in 2022-23.
The report stated that import of laptops, PCs slipped 23.1 per cent to USD 4.1 billion and that of mobile phones came down by 4.1 per cent to USD 857 million in last financial year as compared to 2021-22.
Inbound shipments of integrated circuits contracted by 4.5 per cent to USD 4.7 billion. Import of urea and other fertilizers declined 26 per cent to USD 2.3 billion in 2022-23.
However, import of lithium-ion batteries surged about 96 per cent to USD 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 USD 30.3 billion in FY22 to USD 27.6 billion in FY23. Secondly, India's total goods imports from China grew at a lower rate of 4.2 per cent during FY23, compared to global imports, which grew at a higher rate of 16.1 per cent," GTRI co-founder Ajay Srivastava said.
Lastly, China's share in India's merchandise import decreased from 16.4 per cent in FY18 to 13.8 per cent in FY23, a decline of 15.7 per cent.
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 per cent in 2017-18 to 13.8 per cent 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 USD 91 billion. It was USD 94.6 billion 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 per cent to USD 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.
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