(Yicai Global) Jan. 16 -- India benefits from its trade with China and while the trade deficit is expanding, many of India’s imports from China are intermediary products that drive its own export sector, therefore there is no need to be overly concerned, experts said.

China’s trade surplus with India widened 45.6 percent last year from the year before to USD101 billion, according to the latest data released by the General Administration of Customs on Jan. 13.

Yet trade between China and India jumped 8.4 percent last year from a year ago to reach a historic high of USD136 billion, the customs bureau said. Of this, China’s exports to India surged 21.7 percent to USD118.5 billion while imports from India plunged 37.9 percent to USD17.5 billion.

The increasing import of semi-finished products from China means that India’s exports are also on the rise, Chen Jing, deputy head of a think tank, told Yicai Global. Therefore, India’s trade deficit with China is not “that frightening.”

India and China share a close relationship in trade as Indian companies need to import a huge number of intermediate products from China for further processing and export, Chandrakant Salunkhe, founder and president of Small and Medium Business Development Chamber of India, said in June last year. For example, the vast majority of drug-making devices and over 70 percent of the active pharmaceutical ingredients in India’s generic drug sector are imported from China.

The Indian economy has started to recover from the Covid-19 pandemic, Liu Zongyi, secretary-general of the South Asia and China Center of the Shanghai Institutes for International Studies, told Yicai Global. India imports many intermediate products from China and then exports them after further processing to Europe, North America and other overseas markets.

Indian people also consume a great number of Chinese commodities, such as food, clothes, bicycles, sports equipment, school supplies, lamps, smartphones. India’s cellphone market, for instance, is dominated by China-made handsets with around 70 percent market share. India’s white sugar, turmeric and other spices are also popular in China.

Editors: Zhang Yushuo, Kim Taylor