Indian materials export to China is booming. The starting base may not be particulary high, but the growth rates are spectacular.
Powered by a record growth rate in the iron and steel sector, India's exports to China grew by an impressive 101 per cent during the first seven months of the year, latest Chinese customs statistics show. During the January-July period, India exported iron and steel products worth $709 million to China, compared to $64 million during the same period last year, registering a whopping growth rate of 1008 per cent.
With construction work for the 2008 Beijing Olympics picking up, China's demand for steel has surged, allowing top Indian steel companies to find unprecedented opportunities in the huge Chinese market, industry sources said. According to statistics released by China's General Administration of Customs, Indo-China bilateral trade during the first seven months of 2003 crossed the $4 billion mark, well on target to break the $4.96 billion achieved in 2002. Total trade during the period amounted to $4.087 billion, up 62 per cent.
Of this, India's exports amounted to $2.331 billion, up 101 per cent. The country's imports from China totalled $1.756 billion, up 29 per cent. India also enjoyed a favourable trade balance of $575 million during the period. Based on the current trade figures, one can safely assume that the two-way trade would cross $7 billion by December 2004, senior director and head of East Asia representative office of the Confederation of Indian Industries, Piyush Bahl said. Bahl said if this trend persists, the targeted bilateral trade figure of $10 billion by the end of 2004 is also attainable.
The basket of Indian exports to China comprised mainly iron and steel, ores, plastics, organic chemicals, cotton, mineral fuels, natural or cultured pearls, fish and paper. Apart from the excellent performance by the iron and steel sector, the ores, slag and ash exports from India also contributed to its impressive export growth to China. Ores, slag and ash exports during the first seven months amounted to $644 million, up 77 per cent over the same period last year. Plastics was another star performer, with its exports reaching $173 million compared to $128 million last year, registering a steady growth rate of 35 per cent. Organic chemicals sector exported goods worth $167 million, up 25 per cent over the same period last year. The exports of inorganic chemicals to China netted $79 million, registering an impressive growth of 229 per cent. Paper and paperboard exports also rose steadily, with this sector witnessing 78 per cent increase during the seven-month period. Compared to $18 million during Jan-July in 2002, this year saw Indian exports in the sector worth $32 million. However, cotton exports to China from India saw a steady fall of 42 per cent during the first seven months.
The major items in the Chinese export basket to India were electrical machinery, organic chemicals, mineral fuels and silk. China's top export item to India continued to be electrical machinery. Exports from this sector were worth $376 million, up 38 per cent over the first seven months of 2002. Second in the list were organic chemicals, which amounted to $346 million compared to $294 million last year, a growth of 18 per cent. Other machinery exports to India were worth $146 million, up 34 per cent. Chinese silk exports registered a marginal growth of 5 per cent. Total exports during the period amounted to $120 million compared to $114 million in 2002. Chinese export of plastics witnessed 142 per cent growth at $29 million, while man-made filaments sector also registered a 135 per cent rise, with China shipping goods worth $47 million.