[Jan] Trade with China shrank in 2020

Question 1

What has happened?

Answer 1

India’s trade deficit with China narrowed to a five-year low in 2020.

India’s imports from China shrank by 10.8%

India’s exports to China, however, jumped 16%,

[TRADE DEFICIT = 5 YEAR LOW ;
IMPORTS -11%
EXPORTS +16%]

Question 2

What does the trade deficit imply?

Answer 2

The drop in India’s imports from China largely mirrored a decline in overall inbound shipments in 2020 as domestic demand slumped in the wake of the pandemic.
[PANDEMIC -> DEMAND KAMI HOTI -> MHANUN PAN KAMI HOU SHAKTA DEFICIT]

This makes it difficult to determine whether 2020 is an exception or marks a turn away from the recent pattern of India’s trade with China.

As yet, there is no evidence to suggest India has replaced its import dependence on China by either sourcing those goods elsewhere or manufacturing them at home.

[NO EVIDENCE THAT INDIA HAS REPLACED IT’S IMPORT DEPENDENCE ON CHINA]