1. Electronics & Telecommunication
2. Machinery, nuclear reactors, boilers
3. Organic Chemicals
6. Optical, photo, technical, and medical apparatus
7. Iron & Steel
8. Vehicles (excluding railway or tramway)
Why does India import products from China?
Many different countries tend to source from China for quality products with affordable price tags.
Since the post-pandemic year, China has remained the number one country from India to import products from. [*]
According to Money Control, towards the end of the Q1 of 2023 China, shipments from China to India have risen to $98.5 billion, which accounted for a 4.16 per cent increase in imports from China.
According to the United Nations COMTRADE database on international trade in 2022, India imported $89.66 billion worth of goods from China in the first nine months of the year, which results in the highest on record for three quarters in any year.
While at the same time, India's average applied import duty rose to 18.3% from 15% in the previous year. [*]
If we look at India's other main trade partners, the United States of America followed China with goods worth $77.02 billion in 2021 [*] and the United Arab Emirates came in third with goods worth $43.07 billion. [*]
India-China Trade Balance
Traditionally, India imports more from China than it exports.
In April 2022, India's overall trade balance was at -8.37 Billion USD. However, in April 2023, their overall trade balance dropped to -1.38 Billion USD, both numbers are still considered as trade deficit. [*]
India's extremely high and continuously widening import-export trade deficit is because it imports goods to fill the gap between domestic production and supply as well as consumer and demand preferences for various products.
Although the number of imports has dropped slightly in 2023, the growth of the trade deficit can be attributed to two factors:
- A narrow basket of commodities.
- Market access impediments for most Indian agricultural products and competitive markets, such as pharmaceuticals, IT/ITES, etc. The raw material-based commodities India exports have been overshadowed by Chinese exports. [*]
Major imports from China to India include consumer electronics, computer hardware, electrical parts, mechanical and electrical machinery, organic chemicals, power-related equipment, telecom, intermediate goods, plastics, and fertilizers, to name a few.
On the other hand, India's biggest exports to China include iron ore, mineral fuels, organic chemicals, cotton, copper, diamonds, natural gems, and other raw-material-based commodities. [*]
Many industries in India, especially the medical industry, are heavily reliant on Chinese products.
For example, India's $42 billion pharmaceutical industry imports about 68% of its active pharmaceutical ingredients (APIs) APIs from China [*]. Imports of medical supplies have also soared in the past years.
Most imports from China to India
The table below shows the product categories which India imports from China in 2022 that are worth more than 1 Billion USD in value.
|Products import from China to India 2022||Value ($USD)|
|Electrical, electronic equipment||30.63 Billion|
|Machinery, nuclear reactors, boilers||21.72 Billion|
|Organic chemicals||13.55 Billion|
|Optical, photo, technical, medical apparatus||2.21 Billion|
|Iron and steel||1.98 Billion|
|Articles of iron or steel||1.89 Billion|
|Vehicles other than railway, tramway||1.80 Billion|
|Miscellaneous chemical products||1.71 Billion|
|Inorganic chemicals, precious metal compound, isotope||1.23 Billion|
|Manmade filaments||1.16 Billion|
|Mineral fuels, oils, distillation products||1.07 Billion|
Source: the United Nations COMTRADE database on international trade
Top 8 Chinese Products Imported to India
There are many types of products to import from China to India. Taking into account the data and trends, 2023 and beyond can present several opportunities for small business owners in India in selecting the right products to import from China.
In this section, we will dive into the top 8 Chinese products that are imported to India in 2022, and based on the data provided, we'll help you understand why you should choose to import these products in 2023.
1. Electrical and electronics equipment
According to the United Nations COMTRADE database on international trade, India imported electronic equipment worth $30.63 billion from China in 2022.
Here is the list of imported electronic equipment India imports from China:
- Electronic integrated circuits and micro assemblies
- Electrical apparatus for line telephony or telegraphy
- Similar semiconductor devices
- Transmission apparatus for radiotelephony
- Cordless telephones, and parts for television
- Radio and radar apparatus.
India relies heavily on China for electronic goods, for example, it sources close to 90% of certain mobile phone components from China. [*]
According to the World Trade Center in Mumbai, more than 90% of the electronic goods imported from China were integrated circuits and television sets in 2020. [*]
Imports of machinery, nuclear reactors, and boilers from China to India totaled $21.72 billion in 2022 and $18.8 billion in 2021, representing more than 15% increase from last year.
The United Nations COMTRADE database on international trade showed that the biggest part of imports included
- Automatic data processing machines
- Magnetic or optical readers
- Parts of typewriters and calculating machines
- Air or vacuum pumps
- Air or other gas compressors.
📊 Statistics: India sources 38% of its machinery imports from China, followed by Germany with a share of 7.97%, and the USA with a share of 6.67%.
3. Organic Chemicals
Organic chemicals also represent an important import category from China to India, with a value of $13.55 billion in 2022.
The chemicals are intended to be used mainly in the pharmaceutical industry, such as:
- Heterocyclic compounds with nitrogen
- Nucleic acids, Antibiotics
- Saturated acyclic
- Monocarboxylic acids
- Unsaturated acyclic or cyclic monocarboxylic acids
- Oxygen-function amino-compounds
- Polycarboxylic acids
India's pharmaceutical industry has the main uses for these chemicals. The sector supplies over 50% of the global demand for various vaccines, 40% of generic demand in the US, and 25% of all medicine in the UK. [*]
🔖 Did you know?: India's pharma industry is valued at $49 billion and is the third largest in the world - India.com
According to the United Nations COMTRADE database on international trade, Indian plastic imports from China were 5.44 billion in 2022, and represent the fourth largest import category.
In the past, the Chinese industry was benefiting from a monopoly over the Indian toy market. China alone accounted for 70% of India's toy imports. The low price point, variety, and availability of Chinese toys were huge selling points for customers and manufacturers compared to toys produced domestically, creating competition in the market for toys.
As a consequence, India used to import toy products worth over $600 million from China, with popular items being plastic and electronic toys.
India imports fertilizers, such as diammonium phosphate, to boost its chrome yield. Its importance to the country's agricultural industry is unmatched.
Other fertilizers include urea, a type of plant nutrient popular amongst Indian farmers.
According to the United Nations COMTRADE database on international trade, India imported fertilizers worth $2.34 billion in 2022.
However, in 2021, this figure stood at $2.69 billion.
Although the numbers slightly dropped from the last year, the supply of Chinese fertilizers in India was deemed essential after the Covid-19 pandemic.
The trade route is also crucial for Indian exports, as China is the primary importer of Indian sulfur.
6. Optical, Photo, Technical, and Medical Apparatus
Optical, photo, technical, and medical apparatus imported from China to India was worth $2.21 billion in 2022.
With important product categories, including mechano-therapy appliances, massage apparatus, ozone therapy apparatus, instruments and appliances used in medical, surgical, and dental clinics, measuring or checking instruments and machines, and apparatus for the use of X-rays or of Alpha, Beta, or Gamma radiations.
India currently imports approximately 80% of its medical devices, with the US, Germany, China, Singapore, and the Netherlands being top exporters of such apparatus to the country. [*]
7. Iron & Steel
According to the United Nations COMTRADE database on international trade, India is reported to import iron and steel worth US$ 1.98 billion from China in 2022.
This is a slight increase from 2021's international trade, as there is more demand for iron and steel since the Covid-19 pandemic.
Chinese steel imports include high-quality and high-grade ferroalloy products, which are primarily used by Indian automobile and engineering goods manufacturers.
8. Vehicle Parts and Vehicles
According to the United Nations COMTRADE database on international trade, $1.80 billion worth of auto parts and vehicles were imported to India from China in 2022.
China continues to be the largest source of automotive parts imports for the Indian automotive industry. [*] These imports include engines and transmission parts, rim products, hubcaps, front and rear spoilers, car lights, rearview mirrors, car sensors, and cable for car accessories among others.
Other popular products on eBay include fuel tanks, saddlebags & panniers, mudguards, seats, helmets, and headlight assemblies.
In the financial year 2022 (FY22), the total value of auto components imported from China grew by 35% year-on-year to $5.46 billion, as per data issued by the Automotive Component Manufacturers Association of India (ACMA). [*]
Tips to Reduce Costs When Importing from China to India
If you're a business owner in India looking to import products from China, you may want to consider some of these tips before starting to import products from China.
Tip 1: Understand Indian Import Regulations
Before you start importing Chinese goods to India, you should first understand the regulations set forth by India's Country Commercial Guide, in order to avoid paying unnecessary fees as well as penalties you may not be aware of.
Here are some questions to consider before importing products to India:
- Is your business already a legal entity, or have you registered your business?
- Did you register for a tax in India?
- Did you apply for an Importer-Exporter Code (IEC) issued by the Director-General of Foreign Trade in India?
By complying with the regulations above, importing your products from China can meet all the requirements, gain credibility, and prevent costly non-compliance issues.
Tip 2: Find the best Chinese suppliers
Finding reliable Chinese suppliers is key to reducing your import costs.
Considering factors such as the supplier's experience, the production that they're capable of producing, or whether they're certified to deliver the products you seek should give you some good ideas on they conduct business.
You will be able to understand if your chosen supplier offers competitive pricing while delivering quality products to you.
However, finding the best Chinese suppliers should not be a "one-and-done" initiative. If you're looking at importing products as a long-term objective, building a strong relationship with Chinese suppliers would ultimately help you negotiate better terms of sales, and prices, and reduce overall costs for your imports.
Tip 3: Verify the quality of products imported from China
Another tip that will be crucial to your importing is to verify the quality of products. But how do you go about this?
You may have the best suppliers at your disposal, but it isn't to say that they will deliver to your expectations or exceeds them.
What you can (and should) do is first, look for how durable it is to the functionalities it offers.
For example, if you order large sets of products, using a factory inspection should be your way of inspecting a lot of products. On the other hand, if you're just testing a few sample products, working with inspection agencies can save you more time.
These factors can be key to helping you ensure your product quality, control your costs, and avoid selling faulty products.
Implementing these tips will not only help you reduce costs but also enhance the overall efficiency of your import process.
The import of Chinese goods, products, and raw materials contributes to the local production of many goods in India.
If the production were to stop, it could potentially impact multiple industries and businesses while disrupting the India-China supply chain.
To ensure your business operates at its full potential, it's important to set up and maintain the right account that will keep your business going - a dedicated, virtual business account.
Having the right business bank account will not only help your business thrive, but it will also help keep your payment intact on both ends.
Consider Statrys Business Account for your business. Save the trouble with the traditional bank, save the money when converting funds, and most importantly save your precious time.
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