India’s decision over boycotting Chinese apps and goods were taken on the grounds of social security, protecting privacy and sovereignty. The cold war between both countries based on the Galwan valley issue has disturbed the peace among the citizens. Considering these issues, it is a huge surprise to know about the huge purchase China is making from India. Not just China but exports increased in other east Asian economies too, which is nearly 16 per cent of the Indian export basket. The exports of India to China rose 78 per cent on-year in June 2020.
When the soldiers of India and China had a face-off due to various geographical reasons in the Galwan valley, our country made a huge decision to boycott China on various fronts but still, the dragon is purchasing Indian goods at full strength. In June 2020, India’s export to China increased by 78 per cent stated by Crisil report. The Indian export contraction on-year in April was 60.2 per cent which later improved to a contraction of 10.2 per cent in July. The major reason which can be stated is that the countries who could handle coronavirus are found to be reviving economies and thus exports are rising. This case is not just about China but also other East Asian economies which together becomes 16 per cent of Indian export basket.
The East Asian economies are Malaysia with a high 76 per cent, Vietnam with 43 per cent and Singapore with 37 per cent. The economy curves are flattened for most of these economies due to COVID-19 in this period. On the contrary, the exports to western countries such as the United States of America, United Kingdom and Brazil have considerably declined on the back of a huge increase in the number of coronavirus cases.
The reports suggest that countries who have curbed the effect of the virus and could decrease the number of patients have a chance to restart their commercial activities and thus their exports will rise like China is a case in point. China entered the pandemic and came out quicker than other economies. Most of the economies are falling into recession, where China’s GDP grew at 3.2 per cent on-year in the April-June quarter.
The industrial goods like organic chemicals, iron and steel, ores are the major drivers in expanding the exports of India to China which gave us a double-digit growth. The weaker household demand and imposed restrictions have reduced the imports of India from China. Meanwhile, the extensive imports and declined exports are significantly giving China a trade deficit.
