India’s manufacturing sector struggling under Chinese competition

Manufacturing output in India has suffered from increasing dependency on Chinese goods - both industrial and consumer - which in turn increased the country's already wide trade deficit with China.

While there has been no specific study on India's manufacturing sector on imports from China, the government has been cautious of the widening trade deficit with china, minister of state for commerce and industry Jyotiraditya M Scindia informed the Lok Sabha in a written reply today.

He said the government has been making concerted efforts to improve the growth of manufacturing sector in the country and making it globally competitive. Towards this, the government has taken measures like creating world-class infrastructure, promotion and facilitation of industrial investment, including foreign direct investment, improvement in business environment, development of industry relevant skills etc.

The value of Chinese goods imported by India increased from $30.8 billion in 2009-10 to $39.8 billion in 2010-11, while the percentage share of Chinese goods in India's imports rose from 6.5 per cent in 2009-10 to 7.7 per cent in 2010-11.

With current year imports (April-July) from China already at $18.2 billion, India's imports from that country for the whole fiscal may touch $55 billion, data provide by the minister during question hour in the house showed.

India's trade deficit with China has also steadily increased from $19.2 billion in 2009-10 to $20.5 billion in 2010-11 and is set to reach $38 billion by the end of the current fiscal.