Rising imports of Chinese goods, including umbrellas, toys, and fabrics, are pressuring India’s Micro, Small, and Medium Enterprises (MSMEs), according to the Global Trade Research Initiative (GTRI). The report highlights the challenges domestic businesses face as they compete with cheaper Chinese products.
From January to June 2024, India exported goods worth $8.5 billion, while imports reached $50.4 billion, resulting in a trade deficit of $41.9 billion. China remains India’s largest trade deficit partner.
“China accounts for 29.8 per cent of India’s industrial goods imports. India must invest in deep manufacturing to cut dependence on import of critical industrial products from China,” said Ajay Srivastava, Founder of GTRI. He noted that these imports are ‘hurting’ Indian MSMEs, as many of the products being imported are also produced by local businesses.
The report identifies sectors where Chinese imports dominate. China supplies 95.8 percent of India’s umbrellas and sun umbrellas ($31 million) and 91.9 percent of artificial flowers and human hair articles ($14 million). This dominance extends to glassware, leather goods, toys, ceramic products, and musical instruments, with import shares ranging from 51 to 60 percent.
The influx of low-cost Chinese imports is challenging the survival of Indian MSMEs. “Some MSMEs have to shut down or reduce their operations, and they find it hard to grow due to the easy access to low-cost Chinese products. These challenges affect job creation and economic growth in India,” Srivastava added.
Traditional industries, including furniture, bedding, lamps, and cutlery, are also under threat. Products like articles of stone and carpets, once strongholds of Indian artisans, are losing ground to Chinese goods.
GTRI data shows that in the first half of 2024, India imported $32.8 million worth of silk from China, accounting for 41 percent of the country’s total silk imports. Srivastava called for urgent investments in deep manufacturing to protect Indian MSMEs and maintain economic independence.
“These are sectors where Indian small businesses have traditionally been strong but are now losing ground due to the influx of Chinese goods,” Srivastava concluded.
SEO Keywords: Chinese imports, Indian MSMEs, trade deficit, GTRI report, domestic manufacturing, industrial goods imports, umbrellas, toys, economic independence.
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